ABSTRACT
The International Monetary Fund has a membership of 188 sovereign economies. Apart from the three largest economies in the world, the United States, China and Japan and the other middle-sized G20 economies, the remaining 168 countries are relatively small in terms of GDP. If economies are relatively small, producers and consumers in those economies are price takers, unable to influence how much they pay or receive for goods and services traded internationally. Hence, small economies are ‘dependent’ on prices set in world markets.
