3-1 INTERNATIONAL BUSINESS BASICS

3-2 THE GLOBAL MARKETPLACE

3-3 INTERNATIONAL BUSINESS ORGANIZATIONS

Intro to BusinessChapter 3

Business in the Global Economy

3-1 International Business Basics

Trade Among Nations

Domestic Business –

International Business –

Countries are ____________ and so are their economies.

3-1 International Business Basics

Trade Principles

Absolute Advantage –

Comparative Advantage -

3-1 International Business Basics

Trade Principles

Imports – Exports –

Balance of Trade – the difference between a country’s total exports and imports. Exports > Imports = Imports > Exports =

3-1 International Business Basics

Trade Principles

Money goes from country to country through __________ and _________.

Balance of Payments

Favorable – receive more money than is paid out Unfavorable – sending more money out than it brings in

3-1 International Business Basics

International Currency

Exchange Rate –

Factors affecting value Balance of Payments Economic Conditions Political Stability

3-2 The Global Marketplace

3-2 The Global Marketplace

International Trade Barriers

Quotas –

Tariff –

Embargo –

3-2 The Global Marketplace

Encouraging International Trade

Free-Trade Zones – a selected area where products can be imported duty-free and then stored, assembled, and/or used in manufacturing; often a seaport or airport

Free-Trade Agreement – member countries agree to remove all duties (import taxes) and trade barriers on products traded among them. (Ex: NAFTA)

Common Market – members do away with duties and other trade barriers ; also called an economic community (Ex: European Union, Latin America Integration Association)

3-3 International Business Organizations

Multinational Company (MNC) – an organization that does business in several countries; parent company in ________ country and separate divisions in _____country

MNC Strategies Global Strategy –

Multinational Strategy –

3-3 International Business Organizations

Entering a Global Market

Licensing –

Franchising –

Joint Venture –

3-3 International Business Organizations

International Trade Organizations

World Trade Organization (WTO) Settles trade disputes and enforces free-trade

agreements

International Monetary Fund (IMF) Promotes economic cooperation Monitors exchange rates

World Bank Gives economic aid to less developed countries