Understand the role of business in the global economy. 1

Understand business in the global marketplace. 2

 Factors and regulations companies have to consider when doing business in the global market place  Main entry modes for companies to enter the global marketplace  Main international trade organizations 3

Factors and regulations companies have to consider when doing business in the global market place 4

 What activities are included in domestic business transactions? Where do they take place?  What activities are included international business transactions? Where do they take place? 5

 Absolute advantage exists when a country can produce a good or service at a lower cost than other countries.  Examples: Saudi Arabia-Oil production, Columbia-coffee, Virgin Islands-sand 6

 Comparative advantage is a situation in which a country specializes in the production of a good or service at which it is relatively more efficient.  Examples: China-manufacturing of clothes and household goods  America-Technology  Japan-Electronics 7

 United States has become globally known for its production of wheat more resourcefully. It can produce the product with less human resources. 8

 Imports are items bought from other countries.  Exports are goods and services sold to other countries. 9

 What are some advantages of importing?  What are some disadvantages of importing?  What are some advantages of exporting?  What are some disadvantages of exporting? 10

 What is a way to measure trade relations?  Why are measures of trade relations completed?  Foreign debt is the amount of money a country owes to other countries. 11

What is a balance of trade?  If a country exports more than it imports, it has a trade surplus. This is favorable.  If a country imports more than it exports, it has a trade deficit. This is unfavorable. 12

What is a balance of payments?  If a country receives more money in a year than it pays out, it has favorable balance.  If a country sends more money out than it brings in, it has an unfavorable balance. 13

 Where do banks buy and sell different currencies?  What is an exchange rate?  What are the main factors affecting currency exchange rates? 14

 What are the main environmental issues that could make a difference when conducting business in the global marketplace?  How could these issues impact businesses? 15

16 Four main factors:  Geography  Cultural Influences  Economic Development  Political and Legal Concerns

17  What is included in a country’s geography?  How can this affect a country’s trade?

18  What main cultural factors may influence how business is conducted in the global marketplace?  How can this affect a country’s trade?

19  What key effects of a country’s economics that may influence conducting business in a global marketplace?  How can this affect a country’s trade?

20  What political and legal concerns may influence business activities in a global marketplace?  How can this affect a country’s trade?

21 Trade barriers are restrictions to free trade.  Embargo Why would a government place an embargo?  Quota Why would a company or country set a quota?  Tariffs Why would a government use a tariff?

22 Main factors are:  Common Markets  Free-Trade Agreements  Free-Trade Zone  How do each of these encourage international trade?  What are some examples of each?

Main entry modes for companies to enter the global marketplace 23

24  Franchising  How can this be used by a business as an entry mode?  What are some examples?  Licensing  How can this be used by a business as an entry mode?  What are some examples?  Joint venture  How can this be used by a business as an entry mode?  What are some examples?

Main international trade organizations 25

26  International Monetary Fund (IMF)  World Bank  World Trade Organization (WTO)