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Questions and Answers
What is the global economy?
The global economy refers to the vast network of interconnected economic systems and activities across nations.
How does money add up in other countries?
How do countries make themselves marketable?
What are the different modes of travel available?
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How to obtain a passport and why it is needed?
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What language is necessary for basic travel?
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What is international trade?
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What are investment flows?
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What do global financial markets encompass?
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What is the Philippine Stock Exchange (PSE)?
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What is the role of Bangko Sentral ng Pilipinas (BSP)?
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What is the New York Stock Exchange (NYSE)?
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The global economy allows countries to obtain resources and raw materials that they do not produce domestically.
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International trade and investment generate employment opportunities across various sectors.
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Study Notes
What is a Global Economy?
- The global economy is a complex system of interconnected economic activities spanning across many nations.
- This interconnectedness results in the exchange of goods, services, capital, and labor.
- A change in one country's economy can have ripple effects on other nations.
Components of the Global Economy
International Trade
- Involves the buying and selling of goods and services across international borders.
- Allows nations to access products they cannot produce themselves and sell their own products.
- Countries can specialize in specific industries due to comparative advantages.
Investment Flows
- The movement of capital across boundaries to fund businesses, infrastructure, or real estate.
- Foreign Direct Investment (FDI) involves a company directly investing or owning assets in another country.
- Portfolio investments involve purchasing financial assets such as stocks and bonds in foreign markets.
Financial Markets
- Networks of stock exchanges, banks, and financial institutions operating globally.
- Facilitate trading of financial assets such as stocks, bonds, currencies, and commodities.
- Distribute resources, manage risks, and provide financial flexibility across the global economy.
Importance of the Global Economy
- Economic Growth: Access to larger markets beyond national borders, leading to increased market reach and economic output.
- Resource Access: Global trade allows countries to obtain resources and raw materials they do not produce domestically.
- Job Creation: International trade and investment create employment opportunities across various sectors.
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Description
Explore the intricate components of the global economy, including international trade, investment flows, and financial markets. Learn how these interconnected systems impact nations and drive economic activity worldwide. Test your knowledge on these essential concepts of global commerce.
