The Global Economy

THE GLOBAL ECONOMY

Referred to as “WORLD ECONOMY”

THE GLOBAL ECONOMY

REFERS TO THE INTERNATIONAL EXCHANGE OF GOODS AND SERVICES

THAT IS EXPRESSED IN MONETARY UNITS OF MONEY.

THE GLOBAL ECONOMY

IT MAY MEANS AS THE FREE MOVEMENT OF GOODS, CAPITAL, SERVICES,

TECHNOLOGY, AND INFORMATION.

THE GLOBAL ECONOMY

IT IS CONCERNED WITH THE GLOBALIZATION OF PRODUCTION, FINANCE, MARKETS, TECHNOLOGY, ORGANIZATIONAL REGIMES, INSTITUTIONS,

CORPORATIONS, AND LABOR.

“GLOBAL“ OR

“INTERNATIONAL” ECONOMY

IN SOME CONTEXTS, THE ___ IS

DISTINGUISHED AND MEASURED

SEPARATELY FROM NATIONAL ECONOMIES

WHILE THE “WORLD ECONOMY” IS

SIMPLY AN AGGREGATE OF THE SEPARATE

COUNTRY’S MEASUREMENTS.

“WORLD ECONOMY”

IN SOME CONTEXTS, THE “GLOBAL“ OR

“INTERNATIONAL” ECONOMY IS

DISTINGUISHED AND MEASURED

SEPARATELY FROM NATIONAL ECONOMIES

WHILE THE _ IS

SIMPLY AN AGGREGATE OF THE SEPARATE

COUNTRY’S MEASUREMENTS.

WORLD ECONOMY

IS EXCLUSIVELY LIMITED TO HUMAN

ECONOMIC ACTIVITY AND IS TYPICALLY

JUDGED IN MONETARY TERMS.

MONETARY TERMS

WORLD ECONOMY IS EXCLUSIVELY LIMITED TO HUMAN

ECONOMIC ACTIVITY AND IS TYPICALLY

JUDGED IN _.

ECONOMIC

GLOBALIZATION or

GLOBAL ECONOMY

IT HAS BEEN EXPANDING SINCE THE

EMERGENCE OF TRANSNATIONAL TRADE

AND INCREASED EXPONENTIALLY DUE TO

AN INCREASED RATE OF COMMUNICATION

AND TECHNOLOGY.

COMMUNICATION

AND TECHNOLOGY

ECONOMIC

GLOBALIZATION or

GLOBAL ECONOMY HAS BEEN EXPANDING SINCE THE

EMERGENCE OF TRANSNATIONAL TRADE

AND INCREASED EXPONENTIALLY DUE TO

AN INCREASED RATE OF _ and -.

ECONOMIC

GLOBALIZATION or

GLOBAL ECONOMY

THE CREATION OF WORLD TRADE

ORGANIZATIONS MADE COUNTRIES CUT

DOWN TRADE BARRIERS AND OPEN UP

THEIR CURRENT ACCOUNTS AND CAPITAL

ACCOUNTS.

WORLD TRADE

ORGANIZATIONS

ECONOMIC GLOBALIZATION or GLOBAL ECONOMY -

THE CREATION OF _____ MADE COUNTRIES CUT

DOWN TRADE BARRIERS AND OPEN UP

THEIR CURRENT ACCOUNTS AND CAPITAL

ACCOUNTS.

MARKET

INTEGRATION

PRICES AMONG DIFFERENT LOCATION OR

RELATED GOODS FOLLOW THE SAME PATTERN

OVER A LONG PERIOD OF TIME, AND ___ EXIST.

LOCATION OR

RELATED GOODS

PRICES AMONG DIFFERENT _ or - FOLLOW THE SAME PATTERN

OVER A LONG PERIOD OF TIME, AND MARKET

INTEGRATION EXIST.

MARKET

INTEGRATION

WHEN A GROUP OF RACES OFTEN MOVES

PROPORTIONALLY TO EACH OTHER AND WHEN

THIS RELATION IS VERY CLEAR AMONG

DIFFERENT MARKETS, THEN THE MARKET IS

INTEGRATED.

RACES

MARKET INTEGRATION - WHEN A GROUP OF _ OFTEN MOVES PROPORTIONALLY TO EACH OTHER AND WHEN

THIS RELATION IS VERY CLEAR AMONG

DIFFERENT MARKETS, THEN THE MARKET IS

INTEGRATED.

INTEGRATED

WHEN A GROUP OF RACES OFTEN MOVES

PROPORTIONALLY TO EACH OTHER AND WHEN

THIS RELATION IS VERY CLEAR AMONG

DIFFERENT MARKETS, THEN THE MARKET IS

_.

MARKET INTEGRATION

THE ____ IS AN INDICATOR

HOW MUCH DIFFERENT MARKETS ARE RELATED

TO EACH OTHER.

INTERNATIONAL FINANCIAL INSTITUTIONS

IFI

INTERNATIONAL FINANCIAL INSTITUTIONS

_ ARE CHARTERED BY MORE THAN ONE COUNTRY AND

THEREFORE ARE SUBJECT TO INTERNATIONAL

LAW.

INTERNATIONAL FINANCIAL INSTITUTIONS

THE OWNERS OR SHAREHOLDERS ARE

GENERALLY NATIONAL GOVERNMENTS,

ALTHOUGH OTHER INTERNATIONAL

INSTITUTIONS AND OTHER ORGANIZATIONS

OCCASIONALLY FIGURE AS SHAREHOLDERS.

OWNERS OR SHAREHOLDERS

THE ___ ARE

GENERALLY NATIONAL GOVERNMENTS,

ALTHOUGH OTHER INTERNATIONAL

INSTITUTIONS AND OTHER ORGANIZATIONS

OCCASIONALLY FIGURE AS SHAREHOLDERS.

SHAREHOLDERS

THE OWNERS OR SHAREHOLDERS ARE

GENERALLY NATIONAL GOVERNMENTS,

ALTHOUGH OTHER INTERNATIONAL

INSTITUTIONS AND OTHER ORGANIZATIONS

OCCASIONALLY FIGURE AS _.

PROMINENT IFI’S

MOST OF THE _ ARE CREATIONS OF MULTIPLE NATIONS,

ALTHOUGH SOME BILATERAL FINANCIAL INSTITUTIONS (CREATED BY

TWO COUNTRIES) EXIST AND ARE TECHNICALLY IFI’S.

BILATERAL FINANCIAL INSTITUTIONS

MOST OF THE PROMINENT IFI’S ARE CREATIONS OF MULTIPLE NATIONS,

ALTHOUGH SOME ___ (CREATED BY

TWO COUNTRIES) EXIST AND ARE TECHNICALLY IFI’S.

THE ROLE OF INTERNATIONAL FINANCIAL

INSTITUTIONS IN THE CREATION OF GLOBAL

ECONOMY

MOST OF THE PROMINENT IFI’S ARE CREATIONS OF MULTIPLE NATIONS,

ALTHOUGH SOME BILATERAL FINANCIAL INSTITUTIONS (CREATED BY

TWO COUNTRIES) EXIST AND ARE TECHNICALLY IFI’S.

INTERNATIONAL MONETARY FUND (IMF)

MULTILATERAL DEVELOPMENT BANKS (MDBs)

THE INTERNATIONAL FINANCIAL

INSTITUTIONS (2)

1. WORLD BANK GROUP

2. AFRICAN DEVELOPMENT BANK

3. ASIAN DEVELOPMENT BANK

4. INTER-AMERICAN DEVELOPMENT BANK

5. EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT

MULTILATERAL DEVELOPMENT BANKS (MDBs) include 5

IMF

INTERNATIONAL MONETARY FUND

MDBs

MULTILATERAL DEVELOPMENT BANKS

WORLD BANK GROUP

AN INTERNATIONAL ORGANIZATION DEDICATED TO

PROVIDE FINANCING ADVICE AND RESEARCH TO

DEVELOPING NATIONS TO AID THEIR ECONOMIC

ADVANCEMENT.

WORLD BANK GROUP

THE BANK PREDOMINANTLY ACTS AS

AN ORGANIZATION THAT ATTEMPTS TO FIGHT

POVERTY BY OFFERING DEVELOPMENTAL ASSISTANCE

TO MIDDLE AND LOW-INCOME COUNTRIES.

AFRICAN DEVELOPMENT BANK

IT CONTRIBUTES TO POVERTY REDUCTION AND ECONOMIC AND SOCIAL DEVELOPMENT IN THE LEAST DEVELOPED AFRICAN COUNTRIES BY PROVIDING CONCESSIONAL FUNDING FOR PROJECTS AND PROGRAMS AS WELL AS TECHNICAL ASSISTANCE FOR STUDIES AND CAPACITY-BUILDING ACTIVITIES.

ASIAN DEVELOPMENT BANK

COMMITTED TO ACHIEVING A PROSPEROUS INCLUSIVE RESILIENT AND SUSTAINABLE ASIA IN THE PACIFIC

INTER-AMERICAN DEVELOPMENT BANK

IT WORKS TO IMPROVE THE LIVES IN LATIN AMERICA AND THE CARIBBEAN.

INTER-AMERICAN DEVELOPMENT BANK

THROUGH FINANCIAL AND TECHNICAL SUPPORT FOR COUNTRIES WORKING TO REDUCE POVERTY AND INEQUALITY IDB HELPS TO IMPROVE HEALTH AND EDUCATION AND ADVANCE INFRASTRUCTURE.

INTER-AMERICAN DEVELOPMENT BANK

THEY AIM TO ACHIEVE DEVELOPMENT IN A

SUSTAINABLE CLIMATE CLIMATE-FRIENDLY WAY.

EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT

AN INTERNATIONAL INSTITUTION WHOSE MEMBERS COMPRISED 60 COUNTRIES.

EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT

ITS PURPOSE IS TO FOSTER THE ECONOMIC AND DEMOCRATIC TRANSITION PROCESS AND TO PROMOTE PRIVATE AND ENTREPRENEURIAL INITIATIVES IN THOSE COUNTRIES THROUGH THE PROVISION OF LOANS, EQUITY INVESTMENTS, AND TECHNICAL COOPERATION.

EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT

THE BANK IS DIRECTED ITS AGREEMENT TO PROMOTE IN THE FULL RANGE OF ITS ACTIVITIES ENVIRONMENTALLY SOUND AND SUSTAINABLE DEVELOPMENT.

60 COUNTRIES

EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT MEMBERS IN COUNTRIES (?)

❑ONLY SOVEREIGN COUNTRIES ARE ADMITTED AS

MEMBER-OWNER

❑BROAD COUNTRY MEMBERSHIP TO INCLUDE

BORROWING DEVELOPING COUNTRIES AND DEVELOPED

DONOR COUNTRIES

❑MEMBERSHIP IN REGIONAL DEVELOPMENT BANKS

INCLUDE COUNTRIES AROUND THE WORLD AS

MEMBERS

❑IT HAS ITS OWN INDEPENDENT LEGAL AND

OPERATIONAL STATES

MEMBERSHIP

COMPOSITION OF IFI’s (4)

SOVEREIGN COUNTRIES

ONLY _ ARE ADMITTED AS

MEMBER-OWNER (MEMBERSHIP

COMPOSITION OF IFI’s)

BROAD COUNTRY MEMBERSHIP

_ TO INCLUDE

BORROWING DEVELOPING COUNTRIES AND DEVELOPED

DONOR COUNTRIES (MEMBERSHIP

COMPOSITION OF IFI’s)

MEMBERS

MEMBERSHIP IN REGIONAL DEVELOPMENT BANKS

INCLUDE COUNTRIES AROUND THE WORLD AS

_ (MEMBERSHIP

COMPOSITION OF IFI’s)

INDEPENDENT LEGAL AND

OPERATIONAL STATES

IT HAS ITS OWN _ (MEMBERSHIP

COMPOSITION OF IFI’s)

MAIN OBJECTIVES

IMF PROVIDES TEMPORARY FINANCIAL ASSISTANCE TO MEMBER COUNTRIES TO

HELP EASE BALANCE OF PAYMENT ADJUSTMENTS.

TEMPORARY FINANCIAL ASSISTANCE

IMF PROVIDES _ TO MEMBER COUNTRIES TO

HELP EASE BALANCE OF PAYMENT ADJUSTMENTS.

1. LONG-TERM LOANS (WITH MATURITIES OF UP TO 20 YEARS) AT INTEREST RATES WAY BELOW MARKET RATES. FUNDING COMES FROM INTERNATIONAL CAPITAL MARKETS AND RELEND TO BORROWING GOVERNMENT IN DEVELOPING COUNTRIES.

2. VERY LONG-TERM LOANS (SOMETIMES CALLED CREDITS WITH MATURITIES OF 30 TO 40 YEARS) AT INTEREST RATES BELOW MARKET RATES. FUNDING FOR LOANS COME FROM DIRECT CONTRIBUTIONS BY GOVERNMENT IN THE DONOR COUNTRIES.

3. GRANT FINANCING BY SOME MDB’s FOR TECHNICAL ASSISTANCE ADVISORY SERVICE OR PROJECT PREPARATION.

MDB’s PROVIDE FINANCING FOR DEVELOPMENT TO DEVELOPING COUNTRIES

THROUGH: (3)

LONG-TERM LOANS

1. ____(WITH MATURITIES OF UP TO 20 YEARS) AT INTEREST RATES WAY BELOW MARKET RATES. FUNDING COMES FROM INTERNATIONAL CAPITAL MARKETS AND RELEND TO BORROWING GOVERNMENT IN DEVELOPING COUNTRIES.

20

1. LONG-TERM LOANS (WITH MATURITIES OF UP TO _ YEARS) AT INTEREST RATES WAY BELOW MARKET RATES. FUNDING COMES FROM INTERNATIONAL CAPITAL MARKETS AND RELEND TO BORROWING GOVERNMENT IN DEVELOPING COUNTRIES.

DEVELOPING

1. LONG-TERM LOANS (WITH MATURITIES OF UP TO 20 YEARS) AT INTEREST RATES

WAY BELOW MARKET RATES. FUNDING COMES FROM INTERNATIONAL CAPITAL

MARKETS AND RELEND TO BORROWING GOVERNMENT IN ___ COUNTRIES.

VERY LONG-TERM LOANS

2. ___(SOMETIMES CALLED CREDITS WITH MATURITIES OF 30 TO 40 YEARS) AT INTEREST RATES BELOW MARKET RATES. FUNDING FOR LOANS COME FROM DIRECT CONTRIBUTIONS BY GOVERNMENT IN THE DONOR COUNTRIES.

DONOR

2. VERY LONG-TERM LOANS (SOMETIMES CALLED CREDITS WITH

MATURITIES OF 30 TO 40 YEARS) AT INTEREST RATES BELOW MARKET

RATES. FUNDING FOR LOANS COME FROM DIRECT CONTRIBUTIONS BY

GOVERNMENT IN THE _ COUNTRIES.

30 TO 40

2. VERY LONG-TERM LOANS (SOMETIMES CALLED CREDITS WITH MATURITIES OF ___ TO —- YEARS) AT INTEREST RATES BELOW MARKET RATES. FUNDING FOR LOANS COME FROM DIRECT CONTRIBUTIONS BY GOVERNMENT IN THE DONOR COUNTRIES.

GRANT FINANCING

3. ___ BY SOME MDB’s FOR TECHNICAL ASSISTANCE ADVISORY SERVICE OR PROJECT PREPARATION.

MDB’s

3. GRANT FINANCING BY SOME _ FOR TECHNICAL ASSISTANCE ADVISORY SERVICE OR PROJECT PREPARATION.

GLOBAL CORPORATION

_ OPERATES IN MORE THAN

ONE COUNTRIES

GLOBAL CORPORATIONS

MICHAEL PORTER AT HARVARD UNIVERSITY, DEFINED

GLOBAL BUSINESS AS ONE THAT MAINTAINS A

STRONG HEADQUARTERS IN ONE COUNTRY BUT HAS

INVESTMENTS IN MULTIPLE FOREIGN LOCATIONS.

THE HEADQUARTERS IS ITS HOME COUNTRY.

GLOBAL BUSINESS

MICHAEL PORTER AT HARVARD UNIVERSITY, DEFINED

_ AS ONE THAT MAINTAINS A

STRONG HEADQUARTERS IN ONE COUNTRY BUT HAS

INVESTMENTS IN MULTIPLE FOREIGN LOCATIONS.

THE HEADQUARTERS IS ITS HOME COUNTRY.

MICHAEL PORTER

_ AT HARVARD UNIVERSITY, DEFINED

GLOBAL BUSINESS AS ONE THAT MAINTAINS A

STRONG HEADQUARTERS IN ONE COUNTRY BUT HAS

INVESTMENTS IN MULTIPLE FOREIGN LOCATIONS.

THE HEADQUARTERS IS ITS HOME COUNTRY.

HOME COUNTRY

MICHAEL PORTER AT HARVARD UNIVERSITY, DEFINED

GLOBAL BUSINESS AS ONE THAT MAINTAINS A

STRONG HEADQUARTERS IN ONE COUNTRY BUT HAS

INVESTMENTS IN MULTIPLE FOREIGN LOCATIONS.

THE HEADQUARTERS IS ITS _.

GLOBAL CORPORATION

IN THE WORLD OF FINANCE AND INVESTMENT, A_ HAS SIGNIFICANT

INVESTMENTS AND FACILITIES IN MULTIPLE

COUNTRIES BUT LACKS A DOMINANT HEADQUARTERS.

GLOBAL CORPORATIONS ARE GOVERNED BY THE LAWS

OF THE COUNTRY WHERE THEY ARE INCORPORATED.

DOMINANT HEADQUARTERS

IN THE WORLD OF FINANCE AND INVESTMENT, A

GLOBAL CORPORATION HAS SIGNIFICANT

INVESTMENTS AND FACILITIES IN MULTIPLE

COUNTRIES BUT LACKS A _.

GLOBAL CORPORATIONS

_ARE GOVERNED BY THE LAWS

OF THE COUNTRY WHERE THEY ARE INCORPORATED.

GLOBAL CORPORATIONS

AN INTERNATIONAL COMPANY HAS A

HEADQUARTERS, FOR EXAMPLE IN THE UNITED

STATES, BUT ALSO DOES BUSINESS OVERSEAS AND

MIGHT HAVE A LARGE PRESENCE IN MULTIPLE

AREAS. SUCH A COMPANY WOULD BE GOVERNED

BY U.S. REGULATIONS, ASSUMING ITS

HEADQUARTERS REMAIN IN THE U.S., BUT MAY

ALSO HAVE FOREIGN SUBSIDIARIES WHICH IS

GOVERNED BY LOCAL LAWS.

INTERNATIONAL COMPANY

AN _ HAS A

HEADQUARTERS, FOR EXAMPLE IN THE UNITED

STATES, BUT ALSO DOES BUSINESS OVERSEAS AND

MIGHT HAVE A LARGE PRESENCE IN MULTIPLE

AREAS. SUCH A COMPANY WOULD BE GOVERNED

BY U.S. REGULATIONS, ASSUMING ITS

HEADQUARTERS REMAIN IN THE U.S., BUT MAY

ALSO HAVE FOREIGN SUBSIDIARIES WHICH IS

GOVERNED BY LOCAL LAWS.

LOCAL LAWS

AN INTERNATIONAL COMPANY HAS A

HEADQUARTERS, FOR EXAMPLE IN THE UNITED

STATES, BUT ALSO DOES BUSINESS OVERSEAS AND

MIGHT HAVE A LARGE PRESENCE IN MULTIPLE

AREAS. SUCH A COMPANY WOULD BE GOVERNED

BY U.S. REGULATIONS, ASSUMING ITS

HEADQUARTERS REMAIN IN THE U.S., BUT MAY

ALSO HAVE FOREIGN SUBSIDIARIES WHICH IS

GOVERNED BY _.