It observes the effects on an individual or micro level the trade has on the world economy or on the world market constituting of all the local business, product manufacturing, small-scale industries, big industries, even the value of the money changes, inflation and deflation or dropping of the Sensex. This examines the effects of financial flows between countries. It looks at the effect on a much larger level, or better say, it observes the world economy on a whole level.
It keeps an eye on the money or any other trade flows on the balance of payments and the exchange rate. It also keeps a track and thinks of ways the different exchange rates will have an effect on the economy and decides the appropriate role of international institutions such as the International Monetary Fund IMF.
It also checks whether any country is surplus or deficit in its exports or imports and finances. If a country is in deficit, the IMF provides the country with funds to carry out their trade and survive in the world market. But it does not do the same thing to the place from the migrant came. Migrants go to other places seeking for job and get one with good money. Better payment fulfils the need of any individual. But it leaves a depressive mark on the place from the individual comes.
Developing countries stop or develop more and more slowly with all their young or skilled workers go to another country in search of better jobs and facilities.
Globalization means the world having an open economy and is attached with entire world economy. However, increased globalization has led to increase in the risk of recession. A reduction in economic activity of one country can lead to a reduction in activity in its trading partners as a result of its gradual reduction in demand for their exports, which is one way of determining the business cycle of one country to country.
According to the research of the world economists, the more the trade relations such as imports and exports but more of exports between the countries, the better the demand of the country and thus, better development of the country. Economy is a wonderful subject which if concentrated properly can be easily understood. But, if you are not able to understand then feel free to take help from our well trained teachers and professionals who will guide you throughout the subject.
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