Macroeconomics & the Global Economy

Above, a coin of Caesar Augustus Tiberius, 5 AD

There have been many economies throughout history and currently there are many different national approaches to economics. Capitalist, Socialist and Communist economies are most common with Captialism leading in global dominance.

Economic policies - Economies are the system of buying and selling assets with the most dominant type of global economy being capitalist.

Capitalist – ex. Russia

In a capitalist economy, competition drives the market and people own their own businesses and property and must buy services for private use, such as healthcare.

Socialist– ex. Norway

Socialist governments own many of the larger industries and provide education, health and welfare services while allowing citizens some economic choices

Communist – ex. Cuba

In a communist country, the government owns all businesses and farms and provides its people's healthcare, education and welfare.

Capitalist Business

-Capitalism is a market economy of competition for profit. Most countries now have a capitalist economy, creating a state of increasing global capitalism.

-In capitalism, price is determined by free choices to purchase that increase competition.

-The value of goods and services in capitalism includes both a use value and a mystical or added value that includes status or other intangible qualities. Businesses try to add mystical value through logos and advertising.

-The market works until you reach an “impossible exchange” on something that someone is not willing to sell.

Macroeconomics

-Macroeconomics is the study of national and regional economies to produce a status report of the global economy. International businesses depend on macroeconomics to forecast their work with other countries. There are many different organizations that mediate macroeconomics.

-The IMF- International Monetary Fund oversees global finances. The organization was formed to stabilize exchange rates (Euro for Dollar for example) and depends on political involvement. Venezuela for example decided to pull out of the IMF and World Bank.

-The World Bank acts as support for developing countries with extreme poverty and provides lending. It is controversially involved in some business.

-Importing and Exporting has an ancient history, the Silk Road in China for example. Traditionally trade was regulated by bi-lateral treaties and tariffs between the two countries. Now the World Trade Organization (WTO) supervises regulation

-The World Economic Forum is a Swiss non-profit open conference for discussion of economy, health and environment.

-The World Trade Organization supervises international exchange.

Other factors

-Foreign Exchange Reserves are assets held by a country in different currency. China has the largest foreign reserve, followed by Japan. The foreign reserve is an indicator of a country’s ability to repay debt.

-The US Council on Foreign Relations is foreign policy non-profit organization. It is primarily concerned with international laws, especially at war time but has major global corporate members such as ABC News, Chevron, ExxonMobil, Fed Ex, IBM, Nike, Pepsi and some foreign businesses like Toyota.

-NAFTA (US, Canada and Mexico) and the EU are small regional trade agreements

-The sock market is used within countries as an investment strategy, to build public investors based on speculation for the future.

Global economic scale of international business

-An international business may be as small as one person with one product or as large as hundreds of thousands of employees and billions of dollars.

-According to Forbes, the top 5 global businesses by net worth are GE (US), Royal Dutch Shell (Netherlands), Toyota (Japan), ExxonMobil (US), BP (UK).

-The top 10 international businesses have on average between $200-700,000,000 billion in assets with the last international business on the Forbes 2000 as San-Ai Oil in Japan, which has $1 billion in assets and does $8 billion in business annually.

........................................................................

Image Caesar Augustus, coin of the Roman Empire, http://en.wikipedia.org and statistics www.wikipedia.org