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Environment of global finance
International trade gives people a lot of benefits.
First international trade allows people to produce what they produce best.
Secondly, global trade provides the great variety of goods and services produced around the world.
There are two types of trade exist: visible trade and invisible trade. The first type includes export and import of goods and merchandise. The second one contains full range of services which are exchanged between nations. This can be tourism, transportation, insurance services and also commissions and salaries that are paid to workers from other counties, in other words, immigrant remittances.
As a result of export and import goods and services inflow and outflow of money are formed. Movement of money is reflected in a nation’s balance of payments. And investments can have a crucial impact on it.
Investments allow a host country to buy manufactured materials to build new factories which provides jobs and taxes in the future. So we can say that investments stimulate economic growth for the developing country. But this county has to pay dividends to shareholders. Dividends are expenses for host country and income for investing country at the same time.
Each country wants to have a favorable balance of payments that means the export prevails over the import. When deficit in the balance occurs the government takes certain measures. For example, the government can impose tariffs, quotas on import. In this way import goods will become more expensive for local people and their quality will decrease. Other measures may restrict invisible trade expenditures. For example, citizens and companies may be prohibited from invest abroad. So capital outflow will be reduced. Also a country may devalue its currency. This immediately makes imports more expensive and exports more competitive. But such measures cause inflation in the country.
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my first post
Hello! My name is Ksenia. I'm russian student. I study economics. My specialty is accounting, audit and analisys. So I dream once to work in an enternatinal company in this sphere. I live in Moscow. It's old and intresing city. And very very big and busy. I like to live in a big cities. But sometimes I'm tired from noise, bustle and routine and then I go to some quiet place.
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