Presentation on theme: "Ch. 10 Global Economy 10.1 The Global Marketplace Objectives:"— Presentation transcript:
1 Ch. 10 Global Economy 10.1 The Global Marketplace Objectives: Explain why the world has become an global economyExplain why people and countries specialize in producing goods and services
2 The Global EconomyGlobal economy: the interconnected economies of the nations of the world.International Trade: Involves the exchange of goods and services between nationsThe development of the global economy is often called globalizationMultinational Corporation: A company that does business in many countries and has facilities and offices around the world.
3 International TradeTrade: an exchange of goods and/or services for money/goods/servicesTypes of trade:Domestic: the production, purchase, and sale of goods and services within a country.Imports: goods and services that one country buys from another countryExports: goods and services that one country sells to another country
4 Balance of TradeBalance of Trade: the difference in value between a country’s imports and exports over a period of timeDeficit: imports greater than exportsSurplus: exports greater than importsDo you think the United States has a trade deficit or trade surplus?
5 SpecializationSpecialization: to focus on a particular activity, area, or product.Bakeries make baked goodsAuto mechanics work on automobilesSpecialization builds and sustains a market economyComparative advantage: the ability of a country or company to produce a particular good more efficient than another country or companyComparative advantage helps improve the standard of living for each country
6 CurrencyExchange Rates: the price at which one currency can buy another currency.Exchange rates change from day to dayThe amount a country’s currency is worth depends on how many other countries want to buy its productsCompanies follow exchange rates to find the best prices for productsHow do you think this works?
7 Homework Type out all definitions for Ch. 10 Complete 10.1 Reading Activity and Graphic Organizer