The global economy refers to the interconnected economic activities and transactions that occur between countries around the world. It encompasses trade, investment, and financial exchanges, allowing nations to share resources, goods, and services. This interconnectedness means that events in one country can significantly impact economies elsewhere. Key components of the global economy include international trade, where countries export and import products, and foreign direct investment, where businesses invest in operations abroad. Organizations like the International Monetary Fund (IMF) and the World Bank play crucial roles in promoting economic stability and development across nations.