Fashion and Economics

Globalization The increasing integration of the world economy Check your labels….where are your clothes from? CountryTrips/YR$$/YR US22$1044 UK18$1144 Germany16$1312 Hong Kong 16$1260 Korea15$520 Taiwan11$1000 France11$856 Italy11$852 Japan8$884 Brazil7$776

Global Competition Increased competition among countries Labor is a major component of production Government incentive

Balance of Trade Import: goods that come into a country from foreign sources or goods that a country buys from another country Export: goods that a country sends to a foreign source or goods that a country sells to other countries Balance of Trade: relationship between a country’s imports and exports

Balance of Trade Trade deficit: more imports than exports Trade Surplus: country sells more goods than it buys or imports  US has a large trade deficit  Japan has a large trade surplus

Trade Agreements NAFTA: North American Free Trade Agreement  Between US, Mexico, and Canada  Designed to eliminate or reduce tariffs (fees) for trading goods WTO: World Trade Organization  International organization that promotes trade laws and regulations  Works to reduce barriers in trade

International Fashions Fashions produced in China with fabric made in India with buttons from Bali Designed by a designer in France Modeled on runways in Milan and Paris Purchased in NYC to wear to a trendy party

What do you think the effect of the Internet has had on international fashion?

Supply and Demand Supply is the quantity of product offered for sale at all possible prices Demand is the consumer’s willingness and ability to buy and/or use products Interaction between these 2 factors cause surplus, shortage, or equilibrium Supply and demand play a major role in the pricing of a product

Profit Money a business makes after all costs and expenses are paid The motivation to do business