World Trade Organisation WTO Is the most powerful instituion in by MikeJenny

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									World Trade Organisation (WTO)
Is the most powerful instituion in the world governing international trade restrictions. The
WTO aims to eliminate or reduce trade restrictions. It establishes rules and also organizes
negotiation rounds.

World Bank (International Bank of Reconstruction and Development)
The World Bank has responded wisely to critism of its loans. It established a system of
hearings, allowing economists and environmental protection groups to criticize projected
loans.

International Monetary Fund (IMF)
The IMF aims to stabilize currency exchange rates, in particular to enable repayment of
foreign debt.

Trade restrictions
Trade restrictions are artificial barriers to trade, including tariffs/duties, quotas, subsidies,
“buy local”-restrictions and restrictions based on industrial standards. Trade restrictions lower
general welfare – this was showed by Adam Smith in 1776.

North American Free Trade Agreement (NAFTA)

Balance of trade (Handelsbilanz)
Value of exports – value of imports

Balance of payments (Zahlungsbilanz)
Value of incoming – value of outgoing payments

Money
Is a universal medium of exchange and is a standard of value.

Commercial banks (Kommerzbanken) offer:
  - deposit services in current account, giro account, checking account (Girokonto)
  - use checks, cheques
  - sight demand deposits (Sichteinlagen)
  - savings account (Sparkonto)
  - administer credit (credit card – money is automatically transferred from your current
    account)
  - asset management / trust banks (Vermögensverwaltung)
  - provide loans/credit

check/cheque
is a order by the account holder to his bank, to pay a specified amount of money to a specified
person after a specified date.

Accounting (Rechnungswesen, Kostenrechnung)
Establishes cost categories and evaluates rules and prepares financial reports.

Bookkeeping (Buchhaltung, Buchführung)
Is recording of incoming and outgoing payments (backed up by invoices).

Auditing, Controlling (Buchprüfung, Kontrolle)
GAAT: (US) is medium detailed, mainly requiring “accuracy and transparency” whereas
GoB contains quite detailed evaluation rules;

GoB: evaluations are conservative, and they are part of commercial code. Firms typically are
forced to create hidden reserves (stille Reserven) – German/Austria. This is favorable for
creditors, but not for shareholders.

								
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