BAFIN ( Chapter 01 )

• International Trade - economic transaction that are made between countries
• International Trade

  -exchange of culture,language,information and knowledge.
• International Trade

  -can create jobs, boost economic growth and expose domestic industries to new market.
• Globalization - process by which idea,knowledge or information, goods or services, capital and labor market
• Fiat Money - government issued currency
• Capital Goods -machinery and raw materials
• Consumers Goods - food, television sets and clothing
• Barter -exchanges of goods and services without the use of money.
• Treaty

  -example: NAFTA,CAFTA-DR,EU and APEC
• Treaty

  -formal agreement or contract that establish obligation
• World Trade Organization - It has 165 nations as a members
• World Trade Organization

  -Making sure that nations adhere to the rules of trade treaties
• World Trade Organization

  • Responsible for facilitating the establishment of multinational agreement
• World Bank - Less controversial
• IMF and WB - both created in 1944 by 44 nations that met at Bretton Woods, New Hampshire.
• World Bank

  -focused on making low-interest loans to cash-strapped governments in poor nations
• World Bank - set up to promote economic development
• International Monetary Fund. -ensure the stability of the international monetary system—the system of exchange rates and international payments that enables countries (and their citizens) to transact with each other.
• International Monetary Fund - an organization of 188 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.
• International Monetary Fund - promotes expansion of world trade, reduced trade restrictions, stable exchange rates, minimal trade imbalances, avoidance of currency devaluations and the correction of balance-of-payment problems.
• International Monetary Fund - loans come with strings attached; it requires nation-states to adopt specific economic policies
• Devaluation - official lowering of country’s currency value
• Embago - A country that is restricted from exchanging good with other countries.
• Trade Balance - Value of import is equal to the value of export
• Trade Surplus - Value of exports is greater that the value of import
• Trade Deficit - Value of import is greater that the value of export
• Economic Policies - monetary policy,taxation,budgetting,national ownership and labor market.
• Cash Trapped - Insufficient money of government
• Foreign Direct Investment - method of business expansion, it involves international mergers, acquisitions, and the development of new facilities outside geographical boundaries.
• Foreign Direct Investment - practice of international businesses investing in countries other than their home country.
• United Nation - has 193 countries as members
• United Nation - established October 24, 1945, by 51 countries committed to preserving peace through international cooperation and collective security.
• Quaternary Sector - knowledge and information technology
• Secondary Sector - manufacturing
• Quinary Sectors - infrastructure
• Multilateral Investment Guarantee Agency - Seeks to encourage foreign direct investment indeveloping nations.
• International Finance Corporation - provides monetary and advice to private sector entities.
• International Development Association - provides loans and grants to poor countries.
• International Centre for Settlement of Investment Disputes

  • Provides physical facilities and procedural expertise to help resolve inevitable disputes.
• International Bank for Reconstruction and Development

  • provides financial assistance to creditworthy, middle and low income nations.