Fashion and Economics

1. Fashion and Economics

2. Globalization • The increasing integration of the world economy • Check your labels….where are your clothes from?

3. Global Competition • Increased competition among countries • Labor is a major component of production • Government incentive

4. Balance of Trade • Import: goods that come into a country from foreign sources or goods that a country buys from another country • Export: goods that a country sends to a foreign source or goods that a country sells to other countries • Balance of Trade: relationship between a country’s imports and exports

5. Balance of Trade • Trade deficit: more imports than exports • Trade Surplus: country sells more goods than it buys or imports • US has a large trade deficit • Japan has a large trade surplus

6. Trade Agreements • NAFTA: North American Free Trade Agreement • Between US, Mexico, and Canada • Designed to eliminate or reduce tariffs (fees) for trading goods • WTO: World Trade Organization • International organization that promotes trade laws and regulations • Works to reduce barriers in trade

7. International Fashions • Fashions produced in China with fabric made in India with buttons from Bali • Designed by a designer in France • Modeled on runways in Milan and Paris • Purchased in NYC to wear to a trendy party

8. What do you think the effect of the Internet has had on international fashion?

9. Supply and Demand • Supply is the quantity of product offered for sale at all possible prices • Demand is the consumer’s willingness and ability to buy and/or use products • Interaction between these 2 factors cause surplus, shortage, or equilibrium • Supply and demand play a major role in the pricing of a product

10. Profit • Money a business makes after all costs and expenses are paid • The motivation to do business