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LET’S MAKE A DEAL!!!

LET’S MAKE A DEAL!!!. The business of international trade…. What is International Business?. What is International Business?. All activities necessary to create, ship, and Sell goods/services throughout the world. Taking Advantage…. 2 types Absolute Advantage Comparative Advantage.

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LET’S MAKE A DEAL!!!

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  1. LET’S MAKE A DEAL!!! The business of international trade…

  2. What is International Business?

  3. What is International Business? All activities necessary to create, ship, and Sell goods/services throughout the world.

  4. Taking Advantage… • 2 types • Absolute Advantage • Comparative Advantage • Comparative: • means that country has advantage in more than one area (ie. clothing AND computers). • happens when country chooses more efficient advantage. • Absolute: • means that country can produce cheaper than anybody else. • happens when lots of natural resources are available.

  5. Import VS. Export • comes IN to the country (we bought it). • happens when another country has an advantage. • also happens when perception of quality is higher (ex. BMW, Swiss chocolate). • goes OUT to another country (we sold it). • happens when we have the advantage. • also happens when perception of the quality of American items is higher (ex. U.S. movies, medicines).

  6. It’s all a balance • Trade can be favorable for a country (it sold more than it bought, exports>imports)… • …or unfavorable (it bought more than it sold, imports>exports) • Favorable = trade surplus • Unfavorable = trade deficit

  7. Show me the money! (not all countries are created equal) …. • Exchange rates influence purchasing decisions • Companies want to avoid risky choices (political issues in a country can weigh heavily when it comes to money matters)

  8. Foreign Exchange Rates and Currency Values Three things affect these rates: • Balance of payments (favorable means value of currency is going up, usually from an increase in demand) • Economic conditions (high inflation and interest rates) • Political stability (when new laws are put in place or there is uncertainty with current government)

  9. The NAFTA debate • favorable alternative or disaster in the making??

  10. YOUR ASSIGNMENT… Prepare a 2-5 page report (12 point font, double- spaced)on doing business in a foreign country. Go to www.businessxtra.swlearning.com for the link to commercial guides for doing business in specific countries. Include in your report information from all 10 sections of the report.

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