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Unit Two Government and Global Business

Explore the impact of politics on international trade and business operations. Learn about various political systems globally, potential risks, laws, and government actions influencing business activities.

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Unit Two Government and Global Business

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  1. Unit TwoGovernment and Global Business

  2. Government and Global Business • The Trading Game • Each group represents an imaginary nation with a varied amount of natural resources and technology. • I represent the market and will only purchase finished products that are exactly to my specifications. • The members of the nation with the most money at the end will win a prize.

  3. Unit 2 Vocabulary • Most-Favored-Nation (MFN) • Political System • Protectionism • Quota • Social Responsibility • Tax Holiday • Totalitarian System • Trade Embargo • Boycott • Common Market • Democracy • Duty • Economic Nationalism • Expropriation • Free-Trade Agreement • Free-Trade Zone • Host Country • Home Country

  4. Unit 1 Essential Question • How do governments influence international business?

  5. Amplifying Questions Essential Question 1Government and Global BusinessHow does politics affect global businesses? What are the various political systems around the world? How does the political environment of a host country affect an international company? How does the political environment of the home country affect an international company? International Business pg. 87-91

  6. Types of Political Systems • Democracy—all citizens take part in making the rules that govern them • Totalitarianism—political control held by one person or a small group • Mixed systems—characteristics of both systems

  7. Political Relationships in Business • Global companies operating in host countries • Global companies’ relationships with home countries

  8. Amplifying Questions Essential Question 2Government and Global BusinessHow do governments discourage global business? What laws and trade barriers discourage global business? How can political risk disrupt global business activity? What are the major types of taxes that governments impose around the world? International Business pg. 93-98

  9. Government Activities Influence Business • Laws that protect workers and consumers • Trade barriers • Tariffs • Quotas • Boycotts • Licensing requirements

  10. Political Risks in International Business • Trade sanctions • Expropriation • Economic nationalism • Civil unrest or war

  11. International Taxes • Customs duty • Sales tax • Excise tax • Payroll-related tax • Value-added tax (VAT) • Income taxes

  12. Amplifying Questions Essential Question 3Government and Global BusinessHow do governments encourage global business? What government actions encourage global business activity? What U.S. government agencies help reduce the risk of international business? How do tax incentives encourage global business? International Business pg. 100-104

  13. Encouraging International Business • Free-trade zones • Most favored nation (MFN) • Free-trade agreements • Common markets

  14. Government Protection From International Risk • Export-Import Bank of the United States (Eximbank) • Overseas Private Investment Corporation (OPIC)

  15. Tax Incentives • Corporate tax deduction on income earned by foreign subsidiaries • Double-taxation avoidance treaties

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