Types of Banks

A bank is an institution that deals in money and provides other financial services. Banks are at the heart of any financial system.

Banking is the business a bank is engaged in. There exist different types of banks but their names may vary from country to another.

Central banks such as the National Bank (Ukraine), the Bank of (UK) or the Federal Reserve System (US) look after the government's finance and monetary policy, act as bankers for the state and for commercial banks, and are responsible for issuing banknotes.

Commercial banks deal directly with the public. They offer a wide range of services such as accepting deposits, making loans and managing customers' accounts. The aim of commercial banks is to earn profit.

Merchant banks don't deal with the public. They provide, services

for companies. They specialize in raising capital, for industry, arranging flotation’s, takeovers and mergers, and investment portfolios.

Investment banks are firms that control the issue of new securities (shares and bonds).

Savings banks are financial institutions that specialize in providing services such as savings accounts as opposed to general banking services.

International Trade .

International trade is the exchange of goods and services between countries. It enables countries to obtain some goods and services more cheaply than they could produce them for themselves or to consume goods and services which would otherwise be unobtainable from domestic supply sources.

Through international trade countries can improve their living standard. International trade keeps domestic prices down by creating competition at home and provides large markets abroad.

Governments can control international trade. The most common protectionist measures are tariffs, quotas, exchange controls. They raise the price of imported goods to protect national producers.

The international trade that takes place without barriers such as tariffs, quotas and exchange controls is called free trade.

Free trade area is a form of trade integration between a number of countries, in which members eliminate all trade barriers among themselves on goods and services, but each continues to operate its own barriers against trade with the rest of the world.

Export and Import

Exporting and importing are two aspects of foreign trade.

Exports are goods and services produced in one country but sold in

another. Trade in goods is known as visible exports and trade in services is known as invisible exports. Exports are important because they allow a country to earn foreign exchange which can be used for buying imports from abroad.

Imports are those goods and services which are consumed in one country but which have been purchased from another country. Imports of goods such as food, raw materials, or manufactured goods are known as visible imports; imports of services such as insurance, tourism, freight are known as invisible imports.

Imports are paid for by foreign currency earned by exporters, or by borrowing from foreign governments and agencies like the International Monetary Fund.

If exports exceed imports there is a trade surplus. If imports exceed exports there is a trade deficit.

Business Organization

The economic system is made up of people with basic needs that they must satisfy to survive. As most people cannot produce all the goods and services they need, we depend on other persons or businesses to make them for our consumption.

A business organization is a firm, a company or a business that makes, buys or sells goods, or provides services, to make a profit.

Large companies are referred to as corporations. Many consider the corporation the ideal way to organize business. Large companies operating in many countries are multinationals.

Big business can refer to large business organizations or to any business activity that makes a lot of money.

Small companies are referred to as small businesses or small firms.

When we start a business we talk about, setting up a business or establishing a business. Once a business has been established we talk about being in business or running a business.

To do business means to trade or deal with a company or country. It's not easy to organize a business and to operate it successfully. When a company is not successful, it may go out of business.

The economic situations, as well as decisions taken by the owners of a company, affect how it grows and changes. You may expand your business, specialize in something, you may also diversify your business.