d) The interconnectedness of economies

• What has caused the world economy to become interconnected?

  Globalisation
• What are the four key ways that have led to globalisation?

  1. Growing proportion of output traded internationally
  2. Increased ownership of foreign assets
  3. Rising migration between countries
  4. Faster sharing of technology
• How has international trade affected countries' interdependence?

  It has made countries more interdependent
• What happens to the economic condition of one country when it changes?

  It affects the economic condition of another country
• What should all current balances theoretically add up to?

  Zero
• What does it mean when one country exports something?

  Another country imports that same item
• If a country increases its exports, what is likely to happen to its imports?

  They may decrease or change
• How does the growth of international trade impact local economies?

  It increases interdependence among local economies