What's it: Foreign direct investment (FDI) is a type of capital flow where investors from outside a country invest in its productive assets. Investors can come from companies or individuals. Companies they become multinational companies because they
International economics
International Trade: Your Guide to the Global Economy
International trade fuels the global economy, driving the exchange of goods and services across borders. It plays a critical role in our daily lives, from the smartphone in your pocket to the clothes on your back. But how exactly does international
Exchange Rate Systems: Fixed vs. Floating & Popular Variations
The exchange rate system plays a critical role in the global financial landscape, dictating how currencies are valued against each other. In essence, it's the framework a country adopts to manage its currency's exchange rate. This guide will explore
Trade Barriers Explained: Types, Why They Exist – Impacts on Economy, Consumers, Business
A trade barrier is any obstacle that limits the movement of trade flows between countries. Generally, this measure protects the domestic economy.There are various kinds of trade barriers, including tariffs, quotas, embargoes, sanctions, and
Trade Deficit: Exploring Causes & Impacts + Pros, Cons
What's is: A trade deficit occurs when the value of a country's exports is less than its imports. To finance the deficit, the country has to borrow from foreigners or sell assets (through investment inflows in the capital market, for example).
Factor Income: Understanding Its Role in GDP, GNP, and Balance of Payments
Factor income plays a fundamental role in understanding a country's economic output and the well-being of its citizens. It refers to the earnings generated by the essential ingredients used to produce goods and services – the factors of production.
Division of Labor: Efficiency Engine (Specialization, Productivity)
What's it: Division of labor means dividing the work required to produce a product into different and interdependent tasks. The company breaks down a complex production system into several units. They then assign tasks and workers to each unit.
Globalization Explained for Empowered Investors and Entrepreneurs
Globalization is the process by which goods, services, people, and information flow more freely between various countries, making them interconnected and dependent. The process ultimately leads to more significant interaction and integration in the
Exchange Rates Explained: Impact on Trade & Investment (Types, Determinants)
The exchange rate is the fundamental mechanism that allows countries to trade with each other. It essentially tells you how much of one currency you need to exchange to get another currency. Imagine you're an American tourist in Italy and want to buy
Floating Exchange Rates: Freedom & Fluctuations Explained Simply (Pros, Cons)
A floating exchange rate refers to an exchange rate system in which supply-demand on the foreign exchange (forex) market determines the price of a country's currency. The government does not intervene in the market at all to influence the exchange
Monetary Union: Benefits, Drawbacks & How It Works (EU Example)
A monetary union takes economic integration a step further by creating a unified currency zone. Member countries essentially agree to share a single currency, fostering deeper economic ties and potentially unlocking a range of benefits. This makes it
Regional Integration: Benefits, Challenges & Stages (Trade, Economy)
Regional integration is a powerful economic concept driving cooperation between neighboring countries. This strategy goes beyond simple trade agreements, fostering a deeper level of collaboration that can significantly impact a region's economic