Light

Global Economy

Definition

The global economy refers to the interconnectedness of economic activity and trade between countries around the world. It involves the exchange of goods, services, capital, and knowledge on a global scale.

Analogy

Picture the global economy as a giant marketplace where different nations come together to buy and sell products. Just like how buyers and sellers interact in a marketplace, countries engage in international trade to meet their needs and stimulate economic growth.

Related terms

Mercantilism: An economic policy prevalent during the Age of Exploration that aimed at accumulating wealth through favorable balances of trade by exporting more than importing.

Triangular Trade: A system of trade routes during the 16th-19th centuries involving Europe, Africa, and the Americas. It facilitated the exchange of goods such as slaves, raw materials, and manufactured products.

Commercial Revolution: A period of European economic expansion characterized by increased overseas trade, commercial capitalism, and technological advancements.