Chapter 19 terms 101 - shares of ownership in a company in...

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The Role of Economic Freedom - Economic freedom is expressed as the rights to own private property and to exchange goods, services, and financial assets with minimal government interference. In general the higher is the level of economic freedom, the higher is per capita (Per Person) real GDP and growth rates. The Role of Political Freedom - Political freedom is the right to openly support and democratically select national leaders. It seems less important than economic freedom in explaining economic growth. In fact there is some evidence that greater democracy in a nation reduces economic growth rates because of successful attempts to restrict competition by producers. In general though as countries achieve high standards of living through consistent growth they tend to become more democratic over time. This suggests that there is a positive relationship between economic freedom and economic growth. Portfolio Investment – The purchase of less than 10 percent of the
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Unformatted text preview: shares of ownership in a company in another nation. Foreign Direct Investment The acquisition of more than 10 percent of the shares of ownership in a company in another nation. The International Monetary Fund -The IMF is an international organization that aims to promote world economic growth through more financial stability. Each nation that joins the IMF deposits funds to an account called its quota subscription and these are measured in special drawing rights from a pool of funds held by the IMF. The IMF currently makes both short-term and long-term loans to help finance growth or to provide assistance to countries that are having trouble paying off their debts. The World Bank -A multinational agency that specializes in making loans to about 100 developing nations in an effort to promote their long-term growth and development. The bank mainly finances projects such as irrigation systems and road improvements. 19...
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Chapter 19 terms 101 - shares of ownership in a company in...

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