The Global economy since the Second World War

11 important questions on The Global economy since the Second World War

  • What are the Balance of payments?

  • The balance of payments (BOP) is a statement of all transactions made between entities in one country and the rest of the world over a defined period of time, such as a quarter or a year.

  • What does an imbalance in the economy refer to?

  • Global economic imbalances refer to an unfair distribution of resources between different countries or it may refer to a one-sided trade situation.

  • Where do capital flows refer to?

  • Capital flows refer to the movement of money for the purpose of investment, trade or business production.


Including the flow of capital within corporations in the form of investment capital, capital spending on operations and research and development (R&D).
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  • Why are capital controls established? 

  • Capital controls are established to regulate financial flows from capital markets into and out of a country's capital account.


  • What are speculative Capital Flows?

  • Speculative flow is the movement of hot money into shares of a sector or specific company or an asset class in an attempt to earn short-term gains.

  • What is a current account in Dutch?:

  • Lopende rekening.

  • What is Foreign Direct Investment? (FDI)

  • An FDI is an investment made by a firm or individual in one country into business interests located in another country.

Financial Stability Board

The FSB promotes global financial stability by coordinating the development of regulatory, supervisory and other financial sector policies and conducts outreach to non-member countries. It achieves cooperation and consistency through a three-stage process. The FSB publishes an annual work programme each year which sets out the FSB’s planned work for each of these three stages.

  • Define these three stages:

1. Vulnerability assessment.
2. Policy development.
3. Implementation monitoring.

  • What is an offshore bank?

  • An offshore bank is a bank regulated under an international banking license, which usually prohibits the bank from establishing any business activities in the jurisdiction of the establishment.

  • What happened under the Special Adjustment Program? 

  • Under the Structural Adjustment Program (SAP) introduced in 1986, Nigeria reformed its foreign exchange system, trade policies, and business and agricultural regulations.

  • Define the five principles of the WTO:

  1. Non-discrimination. It has two major components: the most favoured nation (MFN) rule, and the national treatment policy.

  2. Reciprocity -> Wederkerigheid.

  3. Binding and enforceable commitments.

  4. Transparency.

  5. Safety values.

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