Understanding the reading

1. What are the basiccomponents of dealings in the world product and financial markets?

2. Why are exports and imports the most important international activity for most nations?

3. What does the word combination “balance of trade” mean and how is a favourable balance of trade maintained?

4. What are the ways of improving a deficit in the balance of payments? In what way does it affect imports?

5. In what way can investments affect a nation’s balance of payments?

6. In what way can capital for investments abroad be restricted and why? Give facts to illustrate it.

7. When do the countries devalue their currencies? What impact does it have on the nation’s balance of payments? Why are the advantages derived from devaluation soon eliminated?

8. How do you account for the role and function of insurance in international trade?

9. What is purchased when a nation hires work force from another country? Why does immigration contribute to invisible trade of some countries alongside with imports and exports?

10. What happens to the imported goods when a tariff or a quota is imposed?

11. What are the peculiarities of using gold in financial relations? Why do some countries have an agreement with the Federal Reserve Bank of New York to hold their gold in safekeeping?

12. What are the advantages and disadvantages of free trade arrangements?

Scanning*