Economic System What will be produced with our resources? How will these goods be produced? For whom will we produced these goods?Four Main Types Traditional Economy Market Economy Command Economy Mixed Economy
Balance of Payments - is theStages of Market method countries use to monitor all international monetaryDevelopment transactions at a specific period of time. Current Account – account shows High income countries the net amount a country is earning if Upper-middle income it is in surplus, or spending if it is in deficit. countries Capital Account – records the net change in ownership of foreign assets. Lower-middle income Financial Account - international countries monetary flows related to investment in business, real estate, bonds and Low income countries stocks are documented.
Trade in Merchandise and ServicesMerchandise trade Trade in ServicesTwo trade concept (Mode 1) Cross border trade Custom-based trade statistics (Mode 2) Consumption Balance of Payments abroad (Mode 3) Commercial presence (Mode 4) Presence of natural persons
Overview of International Finance Benefits Acess to capital market Promotes domestic investment Worldwide cashflows Prevents excessive domestic regulation Regulatory Global Bodies International Financial Corporation (IFC) International Monetary Fund (IMF) World Bank Growth of International Trade Sub Functions Controller Treasurer