Global financial links have existed for many decades and have provided the basis

Question

Global financial links have existed for many decades and have provided the basis for much of the global trade that has occurred over the years. These links include international agreements and informal trading partnerships as well as formal trading groups and established currency exchange markets and world trade organizations.  

(A.) Why is international cooperation important in promoting an orderly global economy?

(B.) What is the benefit of these international financial links to the US based company.  

(C.) If trading arrangements did not exist would the US based business benefit

Explanation / Answer

Ans(A): International cooperation is very necessary for the smooth running of global economy. Because any nation is not self sufficient to cater its whole needs, it has to depend on other countries to fulfill its some needs in which it has comparative disadvantage. If international cooperation is not there then global economy cannot explore its full potential and global economy growth cannot move orderly. International cooperation is done through trade agreement, trading group and many other form, in which participating members help each other so that all member can gain equally.

Ans(B): International financial links cater the needs of US based company like providing fund, provide insurance against any uncertainity, make agreements with other nations to explore its full potential.

Ans(C): US based business can not benefit if trade agreements do not exist because these agreements fulfill many requirements of it which can not be fulfilled on its own. For example US make an agreement with mexico to get cheap labour of mexico(as labour is cheap in mexico than US) , in this agreement both nations are gaining because US is getting cheap labour whereas mexican labour got work to earn livlihood.

Related Questions

Navigate

• Browse (All)
• Browse G
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.