Unit 2 International Business

Chapter 2 & 3

International Business Why??

Benefits

Negatives

Important Aspects to Foreign Trade

Imports/Exports Imports-items we bring in from another country Exports-items we make and sell to another country. Exchange rate-is the value of currency in one

country compared with another country. Barriers to trades Embargos-when countries stop trade with another

country Tariffs-fees put onto goods to come into another

country

Reasons for International Business

Imports/ExportsLocationEconomic ConditionsPolitical ClimateCultural Influence

Economic IndicatorsGDP (Gross Domestic Product)

Total $ value of all final goods and services

GDP per Capita = / GDP by total population

Economic Indicators Unemployment Rate-is the rate of the portion

of people in the labor force who are wanting to work and cannot find work

CPI (Consumer Price Index) compares the prices in one year to the previous year or set point.

Labor Productivity quantity of a good that an average worker can produce in an hour.

Economic Indicators Price Levels Inflation is a sustained increase in general level of

prices.

Hyperinflation- a tremendous increase in prices.  Deflation is a decrease in general level of prices.  Poverty Level-the percentage of people in a

country that are living below what is considered poverty. 

Economic Cycles Prosperity (Boom) peak of cycle-people are

working at record #’s, GDP highest

Recession (Ripple) demand begins to decrease, production slows, unemployment rises and GDP slows

 

Economic Cycles Depression prolonged period of high

unemployment, weak sale, increase of business failures, and GDP falls rapidly

Recovery unemployment begins to decrease, demand increases, and GDP begins to rise