1. Chapter 4 The Economic Environment

2. Major Industrialized countries around the world:
The Group of Five: U.S.A, Britain, France, Germany, and Japan
The Group of Seven: + Italy and Canada
The Group of Ten: + Sweden, Netherlands, and Belgium
NIC (Newly Industrialized Countries): Singapore, Taiwan, Korea, Hong Kong, Brazil, and Mexico

3. Major Industrialized Countries of the World

4. Market Characteristics
Population demographics
Age distribution, life expectancies, household size, urbanization.
Income
Distribution of low, medium, and high incomes.
Gross domestic product per capita.
Purchasing power parity.
Consumption patterns
Income spent on necessities and luxuries.
Product saturation or diffusion.
Product form differences.

5. Market Characteristics (continued)
Availability and quality of infrastructure
Rail, Air, Highway traffic networks for distribution capabilities.
Communication systems for marketing.
Energy (electrical and fuel) consumption.
Foreign involvement in the economy
Degree of foreign direct investment in country or in a specific industry.
Rules governing foreign investment.
Impact of the economic environment on social development
Urbanization, life expectancy, literacy rates, etc.
Physical Quality of Life Index (PQLI).

6. Purchasing Power Parities (PPP): Show how many units of currency are needed in one country to buy the amount of goods and services that one units of currency will buy in another country.
Physical Quality of Life Index (PQLI): A composite measure of the level of welfare in a country. It has three components: life expectancy, infant mortality, and adult literacy rates.

7. Cross-border business has been driven by three main factors:
Falling regulatory barriers to overseas investment
Smaller costs in telecommunications and transportation
Freer domestic and international capital market in which companies can be bought

8. Regional Economic Integration
Levels of economic integration
Free Trade Area
Least restrictive.
Goods and services are freely trades among all members. Each country maintains its own trade barriers for nonmembers.
Customs Union
Members establish a common trade policy with respect to nonmembers.
Common Market
Factors of production mobility is emphasized. A common external tariff is adopted.
Economic Union
Integration and harmonization of economic and monetary policies is achieved leading to political union.

9. Economic Freedom— 2014 Rankings
Hong Kong
Singapore
Australia
Switzerland
New Zealand
Canada
Chile
Mauritius
Ireland
Denmark
Repressed
Republic of Congo
Timor-Leste
Turkmenistan
Dem. Rep. Congo
Iran
Eritrea
Venezuela
Zimbabwe
Cuba
North Korea
The website for The Heritage Foundation is
Not ranked: Afghanistan, Iraq, Liechtenstein, Sudan, Kosovo, Libya, Somalia, Syria
Singapore - authoritarian state capitalism

10. Integrations
North America Integration European Integration Integration in Latin America Integration in Asia

12. NAFTA
The North American Free Trade Agreement (NAFTA) created the world’s largest free market.
390 million U.S., Canadian, and Mexican consumers and a total output of $10 trillion.

13. Integration in Asia Association of Southeast Asian Nations (ASEAN)
East Asia Economic Group
Asia-Pacific Economic Cooperation (APEC)
South Asian Association for Regional Cooperation (SAARC)