Category: International Economics

Balance of trade (BOT) is the difference between the value of a country’s exports and the value of a country’s imports for a given period. Balance of trade is the largest component of a country’s balance of payments (BOP). Sometimes the balance of trade between a country’s goods and the balance of trade between its services are distinguished as two…

The balance of payments summarises the economic transactions of an economy with the rest of the world. These transactions include exports and imports of goods, services and financial assets, along with transfer payments. The balance of payments tracks international transactions. When funds go into a country, a credit is added to the balance of payments (BOP).…

Globalization means the speedup of movements and exchanges of human beings, goods, and services, capital, technologies or cultural practices all over the planet. One of the effects of globalization is that it promotes and increases interactions between different regions and populations around the globe. Globalization is about the interconnectedness of people and businesses across the world that…

Markets in which you can trade one kind of money for another are called currency markets or foreign exchange markets. The price at which you trade one currency for another is called the exchange rate. The currency market is a one-stop marketplace where different currencies can be bought and sold by various participants operating in diverse jurisdictions…

Capital flows refer to the movement of money for the purpose of investment, trade, or business operations. Inside of a firm, these include the flow of funds in the form of investment capital, capital spending on operations, and research and development. On a larger scale, a government directs capital flows from tax receipts into programs and operations and…

Trade flows are the buying and selling of goods and services between countries. Trade flows measure the balance of trade (exports – imports). This is the amount of goods that one country sells to other countries minus the amount of goods that a country buys from other countries. An example of trade is the act of…

International trade is the exchange of goods and services between countries. Trading globally gives consumers and countries the opportunity to be exposed to goods and services not available in their own countries, or more expensive domestically. This kind of trade contributes and increases the world economy. The most commonly traded commodities are television sets, clothes, machinery,…

International economics is concerned with the effects upon economic activity from international differences in productive resources and consumer preferences and the international institutions that affect them. The following topics are a sample of those considered in the field of international economics: Exchange rates and flows of money between countries. Free trade and trade disputes, such as the…