Unit 2 Chapter 4
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Transcript of Unit 2 Chapter 4
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Unit 2Chapter 4
International Trade
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Global Marketplace Exists because countries need to
trade with one another. Continues to expand
• Because of the reduction in trade restrictions
Makes people all around the world potential customers and employees
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International trade The exchange of goods and services
among nations. Imports – Goods and services
purchased from other countries Exports – Goods and services sold to
other countries
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Benefits of International Trade Consumers
• Competition of the foreign companies• Encourages high quality, lower prices.
Producers• Expand business by working with other
countries• 1/3 of profits of US businesses come from
international trade
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Benefits - Continued Workers
• Leads to higher employment rates Example – Toyota (a Japanese company) has
generated 50,000+ jobs in the United States
Nations• Improves the standard of living for that
countries people• Individuals have more options when making
purchasing decisions.
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Balance of Trade The difference in value between
exports and imports of a nation Surplus – when a nation exports more
than imports Trade Deficit – when a nation imports
more than it exports
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Trade Barriers Tariff - A tax on imports
• Also called a duty Embargo
• A total ban on specific goods coming into and leaving a country
• A lot of times for health reasons
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Trade Agreements World Trade Organization (WTO)
• A coalition of nations that makes rules governing international trade.
NAFTA – North American Free Trade Agreement• International trade agreement between US,
Canada, and Mexico European Union
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4.2 The Global Marketplace
Licensing• Letting another company use a trademark,
patent, formula, company name, for a fee or royalty
Contract Manufacturing• Hiring a foreign manufacturer to make
products Joint Venture
• A business enterprise that companies set up together
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Globalization Selling the same product and using
the same promotion methods in all countries.
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Adaptation Adaptation – a company’s use of an
existing product and/or promotion to which changes are made to better suit the characteristics of a country or region
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Assignment Page 91
• # 7, 9, 10 Page 92
• #16