Economic Relations

What is international trade in international relations?

International trade is the exchange of goods and services between
countries. Trading globally gives consumers and countries the opportunity
to be exposed to goods and services not available in their own countries, or
more expensive domestically.

What Is a Foreign Direct Investment (FDI)?

Foreign direct investment (FDI) is an ownership stake in a foreign

company or project made by an investor, company, or government from
another country.

International Investments are those investments that are made outside the
domestic markets and offer portfolio diversification and opportunities for
risk minimization. An investor can make international investments, thereby
broadening his portfolio and expanding his horizon of returns. International
investments also serve as a means of adding different financial
instruments to the list when domestic markets are confined and limited by
their variety.

What is speculation in international economics?

Definition: “Speculation” in Foreign Exchange is an act of buying and
selling the foreign currency under the conditions of uncertainty with a view
to earning huge gains. Often, the speculators buy the currency when it is
weak and sells when it is strong.

What Is the Balance of Payments (BOP) (Balancing)?

The balance of payments (BOP), also known as the balance of
international payments, is a statement of all transactions made between
entities in one country and the rest of the world over a defined period, such
as a quarter or a year. It summarizes all transactions that a country's
individuals, companies, and government bodies complete with individuals,
companies, and government bodies outside the country.
• The balance of payments includes both the current account and
capital account.
• The current account includes a nation's net trade in goods and
services, its net earnings on cross-border investments, and its net
transfer payments.
• The capital account consists of a nation's transactions in financial
instruments and central bank reserves.
• The sum of all transactions recorded in the balance of payments
should be zero; however, exchange rate fluctuations and differences
in accounting practices may hinder this in practice.
0 seconds of 2 minutes, 0 secondsVolume 75%