Presentation on theme: "Ch. 10 Global Economy 10.1 The Global Marketplace Objectives:"— Presentation transcript:
1Ch. 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
2The 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.
3International 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
4Balance 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?
5SpecializationSpecialization: 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
6CurrencyExchange 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?
7Homework Type out all definitions for Ch. 10 Complete 10.1 Reading Activity and Graphic Organizer