Questions and Answers
Which sector of the global economy is the most influenced by globalization?
Financial sector
What is the global financial system responsible for?
Distribution of financial resources
Where are international financial transactions carried out?
International financial markets
What do international financial transactions solve?
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What are the major international financial transactions?
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Study Notes
Impact of Globalization
- The service sector is the most influenced by globalization, as it is heavily reliant on international trade and investment.
Global Financial System
- The global financial system is responsible for facilitating the flow of money and capital across international borders.
International Financial Transactions
- International financial transactions are carried out in financial centers, such as New York, London, and Tokyo, which are hubs for international banking and investment.
Purpose of International Financial Transactions
- International financial transactions solve the problem of exchanging currencies and facilitating cross-border trade and investment.
Major International Financial Transactions
- Foreign Direct Investment (FDI): investments made by a company or individual in a business or asset in another country.
- Portfolio Investment: investments made in foreign stocks, bonds, and other securities.
- International Trade: exchange of goods and services between countries.
- Remittances: cross-border flows of money sent by individuals working abroad to their families or communities back home.
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