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Agenda

Agenda. Chapter 3 Section 1 – International Business Basics Global Currency Assignment. TRADING AMONG NATIONS. International Business – business activities needed for creating, shipping, and selling goods and services across national borders. (Foreign Trade)

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Agenda

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  1. Agenda • Chapter 3 Section 1 – International Business Basics • Global Currency Assignment

  2. TRADING AMONG NATIONS • International Business – business activities needed for creating, shipping, and selling goods and services across national borders. (Foreign Trade) • US trades with 180 of 196 countries in the world • Imports – bought from other countries • Bananas, Coffee, Cocoa, Tea, Silk, Rubber, Metals • 50% of crude oil and fish • 20% to 50% of sugar, carpet, and leather • Exports – goods/services sent to other countries • Agriculture • Medicine • Plastics • Fertilizer • Chemicals

  3. EXAMPLE OF U.S. IMPORT RELIANCE

  4. International Business Principles Absolute advantage Comparative advantage Exists when a country specializes in the production of a good or service High productivity vsother countries Maquiladoras (Factories) in Mexico • Exists when a country can produce a good or service at a lower cost than other countries • Abundance of natural resources • Saudi Arabia (Oil) • South America (Coffee)

  5. MEASURING TRADE RELATIONS Balance of trade Balance of payments Money is exchanged between countries Favorable balance occurs when receives more money than it pays out Unfavorable balance is when country sends out more money than it takes in • Trade Surplus • Exports more than it imports • Trade Deficit • Imports more than it exports • Japan (few natural resources) • A country can have a surplus with one country and a deficit with another

  6. U.S. TRADE BALANCES

  7. INTERNATIONAL CURRENCY • Foreign exchange rates • Value of one currency compared to another • Three main factors affect currency • Balance of payments • Favorable=constant or rising value • Economic conditions • Inflation rate can reduce the buying power • Political Stability • Customers and businesses want to avoid risk • If government changes it could scare away business • Stable government = ok to trade with

  8. Section Review • What factors affect the value of a country’s currency? • Balance of payments • Economic conditions • Political stability • How does importing differ from exporting? • Importing is bringing items from other countries into a country. • Exporting is selling goods and services to other countries. • How does balance of trade differ from balance of payments? • Balance of trade is the difference between a country’s total exports and total imports. • Balance of payments is the difference between the amount of money that comes into a country and the amount that goes out of it.

  9. Global Currency Assignment • Create a Power-point with 11 slides • Slide 1 – Title Page (Your Name, Global Currency) • Slides 2-11 – Choose a different world currency on each slide • Country & Flag • Currency Name • Value for 20 US Dollars • What people are on the money? • Have at least 3 pictures of the money on each slide • Submit to Schoology under assignment dropbox for Global Currency Assignment

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