WORLD ECONOMY ENVIRONMENT

WORLD ECONOMY ENVIRONMENT

1. Dynamic

2. Dramatic

   • Capital movements
     • Have replaced trade as the driving force of the world economy
     • Production has become "uncoupled"
     • Individual country economies play a subordinate role
     • Dollar and global capital movements

3. Far- Reaching

4. Economic System

   • It depends of:
     • Type of economy
     • Type of government
     • Trade and capital flows
     • The commanding heights
     • Institutions
     • Markets
   • What is good for consumers and how much to produce

5. Market capitalism

6. Centrally planed socialism

7. Capitalism and market socialism

8. Stages of Market Development

   • Low-Income Countries
   • Lower- Middle - Income Countries
   • Upper-Middle-Income Countries
   • High-Income Countries
   • Balance of Payments
     • A record of all economic transactions between the residents of a country and the rest of the world
       • Current account: Merchandise trade and services trade
       • A country with a negative current account has a trade deficit
     • Economic exposure reflects the impact of currency fluctuations on a company's financial performance