Summary
Summary Economics chapter 9-10
- Course
- Institution
- Book
Perfect summary for completing this exam, including a glossary. Perfect summary for passing this exam, including a wordlist.
[Show more]
Connected book
Book Title:
Author(s):
- Edition:
- ISBN:
- Edition:
More summaries for
-
Samenvatting Economy Hoofdstuk 4 t/m 8 en 10
-
Economics chapter 7-8
-
Summary Economics Block 1.4
2 reviews
By: nichelle_barbara • 5 year ago
By: michaeljahangier1 • 6 year ago
Seller
Follow
Larissapaa
Reviews received
Content preview
EconomicsTable of Contents
ECONOMICS ................................................................................................................................. 1
CHAPTER 9 INTERNATIONAL ECONOMIC RELATIONS ........................................................................................ 2
9.1 International economic trends .................................................................................................. 2
9.2 The theory of comparative costs ............................................................................................... 3
9.3 Free trade and protectionism .................................................................................................... 3
9.4 The balance of payments........................................................................................................... 5
9.5 International cooperation ......................................................................................................... 5
Glossary ........................................................................................................................................... 6
CHAPTER 10 THE FOREIGN EXCHANGE MARKET ............................................................................................. 7
10.1 Characteristics of the foreign exchange market ..................................................................... 7
10.2 Spot exchange rate .................................................................................................................. 7
10.3 Exchange rate systems ............................................................................................................ 9
10.5 Forward exchange rate ........................................................................................................... 9
10.6 Exchange rate risk ................................................................................................................. 10
, Chapter 9 International economic relations
9.1 International economic trends
Two main economic trends are becoming obvious: the expansions of emerging markets and
globalisation.
9.1.1 An overview of the world economy
The IMF classifies the world economy into three categories: advanced economies, emerging markets
and developing countries.
The development of the global distribution of production is dependent on economic growth.
Advanced economies lagged behind the world’s average, therefore their share of the world’s
production was decreasing. In contrast to the developing countries, they had a growth rate higher
than the average, their share was increasing.
9.1.2 Globalisation
Globalisation: the process of world-wide integration of economies caused by the rapid increase in
trade and cross-border investments.
Two main reasons for globalisation:
1. Technological innovations: transport and communication have made the wold ‘smaller’. Transport
has become cheaper, which made the geographical distance between places less important. ICT is
makes the exchange of information between places faster and cheaper (interconnectedness).
Increasing global sourcing, a strategy in which a company establishes non-location specific
business operations in those parts of the world where the costs and the added value are most
favourable.
2. Deregulation (and liberalisation): deregulation is the process by which governments
remove, reduce, or simplify restrictions on businesses and individuals with the intent of
encouraging the efficient operation of markets.
Liberalisation usually refers to less government regulations and restrictions in the whole
economy, in exchange for greater participation of private entities.
Capital transactions between advanced countries is free and trade between these
economies face a decreasing number of restrictions. Deregulation of the international
economic transactions gives companies more freedom to decide where in the world they
will buy, sell and produce.
Facts about globalisation:
1. Developments in the world trade: the world trade is the sum of export (or import) of
goods and services. The increase in world trade has been grater than the increase in world
production. The world export ratio (world trade / world production) therefore has
accelerated and the higher the world export ratio, the more open the national economies
are. Companies are increasingly exporting worldwide; this should lead to a reduction of
the intraregional (in region of the country) trade between countries.
2. Developments in international investment: world-wide production is accompanied by
direct investments abroad. Direct investments are the acquisition of an interest in a
foreign company for the purpose of exercising an influence on its policies. For developing
countries, direct investments are an important driver for economic growth. These
countries often have a surplus of labour but a lack of capital, management expertise and
technical knowledge. Direct investments provide developing countries access to capital as well as
the associated technology (more international flow of capital and labour).
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Larissapaa. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $3.25. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
77254 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now