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Unit 2 Chapter 4

Unit 2 Chapter 4. International Trade. 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. International trade.

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Unit 2 Chapter 4

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  1. Unit 2Chapter 4 International Trade

  2. 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

  3. 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

  4. 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

  5. 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.

  6. 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

  7. 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

  8. 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

  9. 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

  10. Globalization Selling the same product and using the same promotion methods in all countries.

  11. 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

  12. Assignment • Page 91 • # 7, 9, 10 • Page 92 • #16

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