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Understanding International Business: Benefits, Challenges, and Economic Indicators

This chapter delves into the essentials of international business, exploring the implications of imports and exports, the significance of exchange rates, and common trade barriers such as tariffs and embargos. It highlights the motivations behind engaging in international trade, examining economic conditions, political climates, and cultural influences. Additionally, key economic indicators like GDP, unemployment rates, and inflation are discussed to provide a comprehensive understanding of how these factors impact international business. Discover the phases of economic cycles and their relevance to global trade.

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Understanding International Business: Benefits, Challenges, and Economic Indicators

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Presentation Transcript

  1. Unit 2 International Business Chapter 2 & 3

  2. International Business • Why?? • Benefits • Negatives

  3. 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 putonto goods to come into another country

  4. Reasons for International Business • Imports/Exports • Location • Economic Conditions • Political Climate • Cultural Influence

  5. Economic Indicators • GDP (Gross Domestic Product) Total $ value of all final goods and services • GDP per Capita = / GDP by total population

  6. 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.

  7. 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. 

  8. 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

  9. 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

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