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| 1. |
How world economy works? |
| Answer» The three principles that describe\xa0how the economy\xa0as a whole\xa0works\xa0are: (1) a\xa0country\'s\xa0standard of living depends on its ability to produce goods and services; (2) prices rise when the government prints too much money; and (3) society faces a short-run tradeoff between inflation and unemployment.\xa0The functioning of\xa0the global economy\xa0can be explained through one word —transactions. International transactions taking place between top\xa0economies\xa0in the\xa0world\xa0help in the continuance of\xa0the global economy. These transactions mainly comprise trade taking place between different countries. | |