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What was the GDP per capita of Viet Nam in 1990, and what is it today?
USD 90 in 1990 and USD 4,450 today
Which currency holds the majority in total global foreign reserves?
Countries should have a minimum of 8 weeks (2 months) of imports value as official foreign reserves.
True
The value of 1 USD is equivalent to __ VND.
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Match the following countries with their respective foreign exchange reserves:
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Define GDP.
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What is GDP per capita?
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Which country had the highest GDP in the list provided?
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What does market capitalization (market cap) represent?
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____ per capita is derived by dividing the respective GDP by its population.
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Inflation leads to an increase in the Consumer Price Index (CPI).
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What is the primary benefit of global trade mentioned in the content?
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What is the market capitalization of Apple Inc. mentioned in the content?
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Vinfast, a company from Viet Nam, listed on the US stock exchange to raise capital from within Viet Nam.
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Match the following regional blocs with their respective number of member countries:
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In the context of BoP, the Current Account means the difference between ______ and imports.
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Which country experienced a Current Account surplus in 2022 due to exporting more than it imported?
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What is the Capital Account in the context of BoP?
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During the Great Depression of 1929, the US experienced a high level of unemployment, reaching over 20%.
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Match the following major economic and financial crises with their descriptions:
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What is the impact of inflation on economic growth?
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What is the primary objective of Central Banks and Ministries of Finance related to inflation?
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High inflation leads to decreased value of money.
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The largest trading partner in the world in terms of export and import is ________.
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Match the countries with their export destinations in 2022:
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What was the total Global Trade in 2022?
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Explain one intrinsic benefit of having bilateral trade larger than the GDP for a country like Vietnam.
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What percentage of Amazon's total revenue is committed to Research & Development?
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Which company invests the highest dollar amount in Research & Development according to the provided content?
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The intrinsic value that could be placed on a particular corporate or product is known as brand _____.
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Interest rates being reduced stimulates economic growth. (True/False)
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Match the following countries with the amount they receive in foreign remittances:
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What is the purpose of regional economic groupings?
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What is the primary role of NATO?
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True or False: The Article 5 of NATO states that an attack on one member is considered an attack on all members.
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According to the content, what is the 21st Century being referred to as?
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What does the existence of large official reserves protect nations from?
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What is mentioned as the leverage of political and economic activity in the content?
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What is the typical lifespan of a multinational Fortune 500 corporation?
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What economic rescue package amount did the US allocate under the Biden Administration in response to COVID-19?
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What is the primary objective of the World Bank?
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The Asian Development Bank (ADB) is predominantly focused on the developmental needs of European countries.
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The AIIB (Asian Infrastructure Investment Bank) was formed in _____ with the objective of developing the infrastructure of the member states.
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Match the following institutions with their primary focus:
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Study Notes
Introduction to International Economics
- The economy of a nation is defined by production, distribution, and trade as well as consumption of goods and services.
- Economies of nations are categorized based on their GDPs: Developed (advanced) economies, Developing economies, and Least Developed economies (LDCs).
GDP and GDP per Capita
- GDPs of various countries:
- US: USD 26 trillion
- China: USD 19 trillion
- Japan: USD 5.2 trillion
- Germany: USD 4.2 trillion
- India: USD 3.8 trillion
- UK: USD 3.7 trillion
- Viet Nam: USD 445 billion (approximately)
- GDP per capita is derived by dividing the GDP by its population.
- Examples of GDP per capita:
- US: USD 75,000
- China: USD 13,700
- Viet Nam: USD 4,450
- India: USD 2,600
International Economic Relations
- International Economic Relations encompasses economic interactions among countries and nation-states.
- It includes policy and regulations, trade in goods and services, assets, finances, capital, and technologies, amongst others.
- International Economics plays a pivotal role in shaping the Global Economy.
Global Economy and Trade
- The combined GDP of the global economy is USD 113 trillion (approximately).
- The total global trade in 2022 was USD 28 trillion.
- Largest trading partner in the world: China.
- Largest exporter of goods and services: China.
- Viet Nam's total trade in 2022: USD 732 billion.
Economic Growth and Inflation
- Economic growth is defined as the increase or improvement of goods and services produced and manufactured by an economy.
- Economic growth is measured by the percentage increase in the nominal GDP.
- Importance of economic growth: It has a direct impact on countries, regions, and the world, as well as the well-being of people.
Inflation
- Inflation is the increase in the price level of goods and services, leading to a decrease in the purchasing power of money.
- Importance of inflation: It is necessary for economic growth, but high inflation can be harmful.
- Balancing inflation and interest rates is crucial for economic growth.
Interest Rates
- Interest rates are determined by Central Banks and Ministries of Finance.
- Interest rates affect borrowing and spending.
- Examples of interest rates:
- State Bank of Viet Nam: around 4.5% per year.
- Federal Reserve Bank (FED): increased interest rates 12 times in 2022.
Trade of Viet Nam
- Viet Nam's total trade in 2022: USD 732 billion.
- Total exports of Viet Nam in 2022: USD 370 billion.
- Viet Nam is one of the four countries having a bilateral trade larger than the GDP.
Reasons for Viet Nam's Bilateral Trade
- Viet Nam has 17 bilateral FTAs, RTAs, Multilateral Trade Agreements, and Partnership Agreements with over 70 countries.
- FDI and FII (Foreign Institutional Investments) in Viet Nam: over USD 20 billion in 2022, expected to exceed USD 30 billion in 2023.
- Strategic location: Easy access to a large population and dynamic region.
- Well-structured policies, regulations, tax structures, and investor-friendly investment policies.
Global Trade and Viet Nam's Trade Partners
- Largest export market of Viet Nam: US, with exports worth USD 118 billion in 2022.
- Largest import market of Viet Nam: China, with imports worth USD 145 billion in 2022.
- Largest bilateral trading partner of Viet Nam: China, with a combined bilateral trade of USD 230 billion in 2022.### International Trade and Globalization
- International trade can bring numerous benefits, including:
- Foreign investments
- Tourism
- Advanced technology
- Innovation and invention strategies
- Increased employment opportunities (both domestic and overseas)
- Regional trade blocs:
- ASEAN (Association of South East Asian Nations, 10 countries)
- EU (European Union, 27 countries)
- RCEP (Regional Comprehensive Economic Partnership, 15 countries)
- CPTPP (Comprehensive and Progressive Trans-Pacific Partnership, 11 countries)
- USMCA (United States–Mexico–Canada Agreement, 3 countries)
- IORA (Indian Ocean Rim Association, 21 countries)
- AU (African Union, 55 countries)
- SAARC (South Asian Association for Regional Cooperation, 8 countries)
- BRICS (Brazil, Russia, India, China, and South Africa, 5 countries)
- ACD (Asian Cooperation Dialogue, 35 countries)
- AfCFTA (African Continental Free Trade Agreement, 47 countries)
Corporates and International Trade
- The largest corporates in the world, such as Apple, Amazon, and Microsoft, contribute to global trade and economic growth.
- Large multinational corporations (MNCs) and transnational corporations (TNCs) can benefit a country's economy by:
- Creating employment opportunities
- Introducing state-of-the-art innovations and inventions
- Enhancing the country's image and profile
- Increasing exports and imports
- Transferring technology
- Examples of large MNCs/TNCs:
- Microsoft (market capitalization of nearly USD 3.25 trillion)
- Walmart (revenue of USD 610 billion)
- Vitol (revenue of USD 510 billion)
- Aramco (revenue of USD 535 billion)
International Investment Scenario
- Foreign direct investments (FDI) and foreign institutional investments (FII) can significantly contribute to a country's economy.
- Countries receiving large amounts of FDI/FII in 2022:
- US (USD 388 billion)
- China (USD 180 billion)
- Singapore (USD 140 billion)
- Hong Kong (USD 120 billion)
- Australia (USD 67 billion)
- Canada (USD 53 billion)
- India (USD 50 billion)
- Viet Nam (USD 21 billion)
- Countries committing large amounts of FDI/FII in 2022:
- US (USD 426 billion)
- Germany (USD 178 billion)
- Japan (USD 175 billion)
- UK (USD 159 billion)
- China (USD 150 billion)
- Netherlands (USD 125 billion)
- Australia (USD 123 billion)
- Hong Kong (USD 106 billion)
- Canada (USD 83 billion)
Economic Development and Image Transformation
- No country has ever developed economically without changing and enhancing its image and perception.
- Examples of countries that have successfully transformed their image and global perception:
- Singapore
- Malaysia
- India
- China
- Viet Nam's image and profile have undergone significant transformation since 1995, with the establishment of diplomatic relations with the US and joining ASEAN.
Other Key Points
- Global equity markets have a combined market capitalization of approximately USD 115 trillion as of September 2023.
- The largest stock markets in the world by market capitalization:
- US (USD 53 trillion)
- EU (USD 13.1 trillion)
- China (USD 13 trillion)
- Japan (USD 5.8 trillion)
- Hong Kong (USD 4.3 trillion)
- India (USD 3.8 trillion)
- UK (USD 3.2 trillion)
- Canada (USD 3 trillion)
- Singapore (USD 600 billion)
- Viet Nam (USD 225 billion)
- The largest banks in the world by assets:
- Industrial and Commercial Bank of China (ICBC, USD 5.7 trillion)
- China Construction Bank Corporation (USD 5.05 trillion)
- Agricultural Bank of China (USD 5 trillion)
- Bank of China (USD 4.2 trillion)
- JP Morgan Chase (USD 3.7 trillion)
- The largest money/asset management firms in the world by assets under management (AUM):
- BlackRock (USD 10 trillion)
- Vanguard Group (USD 8.4 trillion)
- Fidelity Investments (USD 4.3 trillion)
- UBS (USD 4.4 trillion)
- State Street Global Advisor (USD 4.1 trillion)
- Foreign exchange reserves of countries:
- China (USD 3.2 trillion)
- Japan (USD 1.25 trillion)
- Switzerland (USD 875 billion)
- India (USD 600 billion)
- Russia (USD 568 billion)
- Taiwan (USD 656 billion)
- Saudi Arabia (USD 430 billion)
- Thailand (USD 225 billion)
- Viet Nam (USD 90 billion)
- Factors that influence exchange rates:
- Trade balance
- Inflation
- Interest rates
- Geopolitical and geo-economic issues
- Perception, credibility, and optimism of the economy and currency### Viet Nam's Economic Growth
- In 1990, Viet Nam's GDP per capita was USD 90, which has now increased to USD 4,450, making it one of the fastest-growing large economies in the world.
- Viet Nam has attracted significant investments from global corporations such as Samsung, Toyota, Intel, Hyundai, LG, Honda, and Apple, due to its stability, incentives, strategic location, competent human resources, and low production costs.
Foreign Exchange Reserves
- The official foreign reserves of a country should cover at least 8 weeks (2 months) of imports.
- Most official reserves are held in USD (59%), followed by Euro (20%), Japanese Yen (5.5%), British Pound (4.9%), Chinese Yuan (2.6%), and Canadian dollar (2.4%).
Factors Influencing Exchange Rates
- Trade balance (imports and exports difference)
- Inflation
- Interest rates
- Geopolitical and geo-economic issues
- Foreign Direct Investments (FDI) and Foreign Institutional Investments
- Perception, credibility, and optimism of economy and currency
Research and Development (R&D) Investments
- Companies that commit the largest amount of funds to R&D:
- Amazon: USD 73 billion (14% of total revenue)
- Alphabet (Google): USD 40 billion (14% of total revenue)
- Meta (Facebook): USD 36 billion (30% of total revenue)
- Apple: USD 28 billion (7% of total revenue)
- Microsoft: USD 27 billion (13% of total revenue)
Largest Corporations in Terms of Sales
- The largest corporations in the world, both in terms of revenue/sales and market capitalization, are listed as Fortune 500.
- The largest corporations in 2022:
- Walmart: USD 611 billion
- Saudi Aramco: USD 603 billion
- State Grid of China: USD 530 billion
- Amazon: USD 513 billion
- China National Petroleum: USD 483 billion
- Sinopec Group: USD 471 billion
- ExxonMobil: USD 413 billion
- Apple: USD 394 billion
Most Valuable Brands in the World
- According to Brand Finance:
- Amazon: USD 300 billion
- Apple: USD 297 billion
- Google: USD 281 billion
- Microsoft: USD 195 billion
- Walmart: USD 113 billion
- Samsung: USD 100 billion
- ICBC: USD 70 billion
- Tesla: USD 66 billion
- Tik Tok: USD 65 billion
- Coca-Cola: USD 60 billion
- Mercedes Benz: USD 60 billion
Most Valuable Apparel Brands in the World
- Nike: USD 32 billion
- Louis Vuitton (LVMH): USD 27 billion
- Chanel: USD 19.5 billion
- Gucci: USD 18 billion
- Adidas: USD 15.8 billion
- Hermes: USD 14.2 billion
Countries with the Most Foreign Remittances
- India: USD 111 billion
- Mexico: USD 61 billion
- China: USD 53 billion
- Philippines: USD 38 billion
- Egypt: USD 33 billion
- Pakistan: USD 32 billion
- France: USD 28 billion
- Bangladesh: USD 24 billion
- Germany: USD 22 billion
- Nigeria: USD 20 billion
Countries with the Most Migrants/Expatriates
- US: 52 million
- France: 8.6 million
- Germany: 16 million
- Russia: 12 million
- Saudi Arabia: 14 million
- UK: 10 million
- UAE: 8.8 million
- Canada: 8 million
- Australia: 7.8 million
- Spain: 6.9 million
- Italy: 6.4 million
Significance of Migrant Labor
- Migrant labor is instrumental in the development of countries.
- Remittances from migrant workers contribute significantly to the GDP of labor-sending countries.
- Migrant workers gain new skills and knowledge that can benefit their home countries upon their return.
International Finance and Commerce
- Every country is categorized based on its GDP, GDP per capita, and GDP per capita based on Purchasing Power Parity (PPP).
- Singapore is the richest country in terms of GDP per capita on PPP (around USD 130,000).
- The US is the largest economy in the world, with a GDP of USD 26.5 trillion, and China is the second largest, with a GDP of USD 19.5 trillion.
- Viet Nam has a GDP per capita of around USD 4,400 and GDP per capita on PPP of around USD 14,000.
Balance of Payment (BoP)
- The BoP is the sum of the current account, capital account, and financial account.
- A nation's BoP is crucial, and an ideal economic situation would have all three components equal to zero.
- Viet Nam has a current account surplus, while the US has a current account deficit.
- China has consistently enjoyed the largest current account surplus.
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Description
This quiz reviews the basics of international economics, including the economy of a nation, GDP, and classification of countries into developed and developing economies.
