GLOBAL ECONOMY Flashcards
Refers to the interconnected worldwide economic
activities that take place between multiple countries.
GLOBAL ECONOMY
HOW DOES GLOBAL ECONOMY WORK
Transactions
GLOBAL ECONOMY
CHARACTERISTICS
-GLOBALIZATION
-INTERNATIONAL TRADE
-INTERNATIONAL FINANCE
-GLOBAL INVESTMENT
integrates national and regional economies, societies, and cultures through trade,
communication, immigration, and transportation, leading to the global economy and improved
domestic economies.
-GLOBALIZATION
impacts international trade, allowing countries to exchange goods and services,
specializing in products with comparative advantages, and promoting economies’ ability to produce at
lower opportunity costs.
-INTERNATIONAL TRADE
currency exchange rates and monetary policy, is a key feature of a
global economy, facilitating faster money transfer between countries compared to goods, services, and
people.
-INTERNATIONAL FINANCE
an investment strategy that transcends geographical boundaries, primarily
involving foreign direct investment (FDI).
-GLOBAL INVESTMENT
Actors present in global economy
Governments and central banks
Multinational Corporations (MNCs)
International organizations
Financial institutions
Consumers and individuals
Benefits of global economy
Free trade
Movement of labor
Increased economies of scale
Increased investment
method for countries to exchange goods and services
Free trade:
workers can
look for jobs in other countries
Movement of labor
specialization of goods production in most countries has led to
advantageous economic factors such as lower average costs and lower prices for customers.
Increased economies of scale
Due to the presence of global economy, it has become easier for countries to
attract short-term and long-term investment. Investments in developing countries go a long way in
improving their economies.
Increased investment
a social system that is composed of limitations, organizations, groups of
individuals, rules and regulations and has unity among different groups.
MODERN WORLD SYSTEM
