1. The World Economy: An Overview

2. 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

3. Balance of Payments - is the
Stages of Market method countries use to monitor
all international monetary
Development 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.

4. Trade in Merchandise and Services
Merchandise trade Trade in Services
Two 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

5. 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