GLOBAL ECONOMY

REPORTER: PORRAS ARSHIE

GALOY, FATIMA
SILVANO, NERESSA
 Learning Objectives
 Learn what is global economy and its
characteristics.
 Importance of global economy.
 Who control the global economy.
 How does global economy works.
 Effects of global economy.
 Benefits of global economy.
 Factors affecting the global economy.
 The Global Economy

 refers to the interconnected

worldwide economic activities that
take place between multiple
countries. These economic activities
can have either a positive or negative
impact on the countries involved.
Characteristics of Global
Economy

 Globalization

 International trade

 International finance

 Global investment
Characteristics of Global
Economy

Globalisation

 describes a process by which national and

regional economies, societies, and cultures
have become integrated through the global
network of trade, communication,
immigration, and transportation.
Characteristics of Global Economy

International trade
 is considered to be an impact of
globalisation.

 It refers to the exchange of goods and

services between different countries, and it
has also helped countries to specialise in
products which they have a comparative
advantage in.
Characteristics of Global Economy

International finance

 Money can be transferred at a faster rate

between countries compared to goods,
services, and people; making international
finance one of the primary features of a
global economy.
Characteristics of Global Economy

Global Investment

 This refers to an investment strategy that is

not constrained by geographical
boundaries. Global investment mainly takes
place via foreign direct investment (FDI).
Who controls the global
economy?
 The global economy is dominated by large
financial institutions. According to world
economic news, US banks participate in
many traditional government businesses
like power production, oil refining and
distribution, and also the operating of
public assets such as airports and train
stations.
 How does the global economy
work?
Transactions

 International transactions taking place

between top economies in the world help in the
continuance of the global economy.

 These transactions mainly comprise trade taking

place between different countries. International
trade includes the exchange of a variety of
products between countries. It ranges all the way
from fruits and foods, to natural oil and weapons.
What are the effects of global economy?

Brexit vote

 Brexit is an abbreviation of two English

words: 'Britain' and 'exit‘.
 it refers to the withdrawal process of the

United Kingdom(UK) from the European Union

(EU).
What are the effects of global economy?

 the main cause of these effects is

economics — based on the production and
exchange of goods and services.

 restrictions on the import and export of

goods and services can potentially hamper
the economic stability of countries who
choose to impose too many.
What are the effects of global economy?

Countries add barriers to international trade

 Tariffs
-taxes on imports

Trade Quotas
- limitation on the number of products that can be
imported into a country

Trade barriers often affect the economies of the trading

countries, and in the long run, it becomes difficult to
keep employing such barriers.
What are the benefits of global economy?

 Free trade:

 Movement of labour:

 Increased economies of scale:

 Increased investment:
 What are the benefits of global economy?

Free trade:

 allows countries to specialise in the

production of those goods in which they have
a comparative advantage.

Increased economies of scale:

 helps in reducing geographical inequality.

 What are the benefits of global economy?

Increased economies of scale:

 lower average costs and lower prices for

customer.

Increased investment:

 investments in developing countries go a

long way in improving their economies.
 Factors affecting global economy

Natural Resources
-must be managed sustainably.
Infrastructure
-investments in infrastructure contributes to
higher productivity and growth, facilitates trade and
connectivity, and promotes economic inclusion.
 Factors affecting global economy

Population
-the more people you have, the more work is done, and the
more work is done, the more value (or, in other words, money)
is created.

Labour
 finding enough people with the right skills to meet increasing
demand. This often results in rising wages in some industries.
 Factors affecting global economy

Human capital
-perceived to increase productivity and thus
profitability.

Technology
 -lift the trajectory of productivity and economic
growth, and to create new and better jobs to replace
old ones
 Factors affecting global economy

Law

 increases the standard of living, and

promotes prosperity.
END OF PRESENTATION