Understanding Global Economics: Trade, Currency, and Development

Macroindicators

Goods and services – GDP, Labor – Unemployment, Capital – Inflation.

Mercantilism

Based on the principle that the world's wealth was static, nations attempted to accumulate the largest possible share of that wealth by maximizing their exports and by limiting their imports via tariffs.

WTO

International institution that oversees global trade rules among nations.

HeckscherOhlin Model

Evaluates the equilibrium of trade between two countries with varying specialties and natural resources.

Leontief Paradox

Capital-abundant countries export labor-intensive goods and labor-abundant countries export capital-intensive goods.

GDP

Monetary value of all finished goods and services made within a country during a specific period.

Inflation

Rate at which the value of a currency is falling and the general level of prices for goods and services is rising.

FDI

Foreign Direct Investment.

Rating Agencies

Assess and rate the creditworthiness of countries and companies.

Porter

Competitive Rivalry, Supplier, Buyer, Threat of Substitution, Threat of New Entry.

Mature Markets

High level of economic development, well-established market mechanism, high market saturation, slow market growth, and strong competition.

Digital Divide

Encompasses technical and financial ability to utilize available technology and access to the Internet.

Abs Smith Compa Ricardo

Ability to produce a particular good or service at a lower opportunity cost than trading partners.

Competitive Porter

Stages of Internationalization: export/import, licensing, franchising, different forms of FDI.

Glocalization

Product or service developed and distributed globally but adjusted for local markets.

Gold Standard

Fixed monetary regime where government's currency is freely convertible into gold.

Bretton Woods Agreement

Created collective international currency exchange regime.

Floating Exchange Rate

Determined by supply and demand on the open market.

Forex Market

Global electronic network for currency trading.

Eurozone

Economic and geographic region of European Union countries using the euro.

IMF

Promotes global economic growth, financial stability, international trade, and poverty reduction.

World Bank

Provides financing, advice, and research to aid economic advancement in developing nations.

Currency Convertibility

Ease with which a country's currency can be converted into gold or another currency.

Fisher Effect

Real interest rate equals nominal interest rate minus expected inflation rate.

IFE

Differences in nominal interest rates between countries predict changes in exchange rates.

Human Development Index (HDI)

Statistic by the United Nations measuring social and economic development levels in various countries.