Market Integration

• Market Integration

  • Cambridge Business English Dictionary it is a situation in which separates markets for the same product become one single market, for example when an import tax in one of the market is removed
• Benefits of Market Integration

  • Broadening the range of financial services and investment opportunities available to consumers and increasing competition in the provision of those services
• Robson (1998)

  • Integration is taken to denote a state of affairs or a process involving attempts to combine separate national economies into larger economic regions
• Market Integration

  • fusing of many markets into one. It means that price differences between countries are eliminated as all markets become one
• Money is any item or medium of exchange that is accepted by people for payment of goods and services
• Type of Money

  COMMODITY MONEY

  • are a type of money that is in the form of a commodity with intrinsic value
  • refers to a physical item such as gold or silver that possesses intrinsic value, whereby its value transcends means of exchange
• Types of Money

  Representative Money

  • not money itself, but something that represents money. It is exchangeable for a commodity
  • a certificate of token that can be exchanged for the underlying commodity
• Types of Money

  Fiat Money

  • money with absolutely no intrinsic value that is used as money. It only has value because the government says its valuable
  • all kind of money that are made legal tender be a government decree or fiat
• Types of Money

  Digital Money

  • Any form of money or payment that exists only in electronic form.
• 4 Functions of Money

  1. Money is a unit of account
  2. money is a medium of exchange
  3. money is a store of value
  4. money is a standard of deferred payment
• Financial Institutions

  • are organization that process monetary transactions, including business and private loans, customer deposit and investment
• 3 Types of Financial Institution

  1. Depository institution - allow customers to deposit money in an account

  • Commercial Banks - for profit entities that provide a number of services to their account holders. Usually operate at the regional or national level, have large advertising budgets and charge higher fees than a credit union.
  • Credit Union - are non-profit entities owned by account holders also called members.
• 3 Types of Financial Institution

  1. Non-Depository Institutions - transfer funds from borrowers by investing the funds they received

  • Insurance Companies - provide customers with policies that protect them from risk, for which they changed them monthly premiums
• 3 Types of Financial Institution

  1. Investment Institutions - a corporation or trust company that manages, sells and markets investment product to the public

  • Investment Banks
• THE BRETTON WOODS SYSTEM

  • Because of the fear of the recurrence of lack of cooperati0n among nation-states, political instability, and economic turmoil (especially after the Second World War), reduction of barriers to trade and free flow of money among nations became the focus to restructure the world economy and ensure global financial stability.
• THE GENERAL AGREEMENT ON TARIFFS AND TRADE was an international treaty and organization that was established in the aftermath of World War II with the primary goal of promoting international trade by reducing trade barriers and tariffs.
• WORLD TRADE ORGANIZATION- is an independent multilateral organization that became responsible for trade in services, non-tariff-related barriers to trade, and other broader areas of trade liberalization
• INTERNATIONAL MONETARY FUND- is a cooperative institution that 182 countries have voluntarily joined because they see the advantage of consulting with one another on this forum to maintain a stable system of buying and selling their currencies.
• WORLD BANK- multinational financial institution established at the end of World War II (1944) to help provide long-term capital for the reconstruction and development of member countries
• ORGANIZATION FOR ECONOMIC COOPERATION AND DEVELOPMENT- to promote policies that improve the economic and social well-being of people around the world. It aims to foster economic growth, achieve higher living standards, and contribute to global development.
• ORGANIZATION OF PETROLEUM EXPORTING COUNTRIES- was established to coordinate oil production and stabilize prices.
• EUROPEAN UNION- is a single market, which is similar to a free trade area in that it has no tariffs, quotas or taxes on trade
• NORTH AMERICAN FREE TRADE AGREEMENT- was a landmark trade agreement that came into force on January 1, 1994, and linked the economies of Canada, Mexico, and the United States.