Introduction to Business, Business in a Global Economy Slide 1 of 64 Technology’s Influence on Business We are all part of the global marketplace. The global marketplace exists anywhere business crosses national borders.

Introduction to Business, Business in a Global Economy Slide 2 of 64 Technology’s Influence on Business Countries can satisfy their citizens’ wants and needs by buying them in the global market.

Introduction to Business, Business in a Global Economy Slide 3 of 64 The Global Marketplace A multinational corporation is a company that does business in many countries and has facilities and offices in many countries around the world.

Introduction to Business, Business in a Global Economy Slide 4 of 64 The Global Marketplace The global marketplace works much like a shopping mall or a supermarket.

Introduction to Business, Business in a Global Economy Slide 5 of 64 The Global Marketplace The United States is rich in resources— human, natural, and production—but it still needs things from other countries.

Introduction to Business, Business in a Global Economy Slide 6 of 64 Figure 10.1 MAJOR EXPORTS AND IMPORTS OF THE UNITED STATES Look at the graph to see what products the United States imports and exports. Name the product that the United States exports more than it imports. Source: Standard & Poor’s

Introduction to Business, Business in a Global Economy Slide 7 of 64 Specialization Countries specialize in producing certain goods and services. By specializing, countries can sell what they produce best so they can buy the products they need from other countries.

Introduction to Business, Business in a Global Economy Slide 8 of 64 Specialization The kinds of resources available to a country often influence what it specializes in producing.

Introduction to Business, Business in a Global Economy Slide 9 of 64 Specialization A country with little money or advanced technology but a large population might specialize in manual labor.

Introduction to Business, Business in a Global Economy Slide 10 of 64 Types of Trade Imports are goods and services that one country buys from another country. Exports are goods and services that one country sells to another country.

Introduction to Business, Business in a Global Economy Slide 11 of 64 Types of Trade Other types of trade include: Investment Exchange of human resources Tourism Military aid Loans

Introduction to Business, Business in a Global Economy Slide 12 of 64 Currency Countries have to pay for each other’s products with currency. Currency is another name for money. Just as countries use different lan- guages, they use different currencies, such as dollars, pesos, and yen.

Introduction to Business, Business in a Global Economy Slide 13 of 64 Currency The foreign exchange market is made up of banks where different currencies are exchanged.

Introduction to Business, Business in a Global Economy Slide 14 of 64 Exchange Rates The exchange rate is the price at which one currency can buy another currency. Exchange rates change from day to day and from country to country.

Introduction to Business, Business in a Global Economy Slide 15 of 64 Exchange Rates How much the currency of a country is worth depends on how many other countries want to buy its products.

Introduction to Business, Business in a Global Economy Slide 16 of 64 Prices A company follows the change in exchange rates to find the best prices for products.

Introduction to Business, Business in a Global Economy Slide 17 of 64 Prices When the value of a country’s currency goes up compared to another country’s, it has a favorable exchange rate.

Introduction to Business, Business in a Global Economy Slide 18 of 64 Prices When the value of a country’s currency goes down compared to another country’s, it has an unfavorable exchange rate.

Introduction to Business, Business in a Global Economy Slide 19 of 64 Prices Some countries choose to lower the value of their currency to bring in more business.

Introduction to Business, Business in a Global Economy Slide 20 of 64 Balance of Trade Balance of trade is the difference in the value between how much a country imports and how much it exports.

Introduction to Business, Business in a Global Economy Slide 21 of 64 Balance of Trade When a country exports more than it imports, it has a trade surplus. When a country imports more than it exports, it has a trade deficit.

Introduction to Business, Business in a Global Economy Slide 22 of 64 Balance of Trade A country can have an unfavorable balance of trade with one country and a favorable balance with another.

Introduction to Business, Business in a Global Economy Slide 23 of 64 Graphic Organizer How Exchange Rates Affect the Balance of Trade Graphic Organizer Weak Currency FAVORABLE BALANCE OF TRADE More exports than imports Strong Currency More imports than exports NEGATIVE BALANCE OF TRADE Trade surplus (leftover money) Trade deficit (debt)

Introduction to Business, Business in a Global Economy Slide 24 of 64 Making an Ethical Decision 1.What are the benefits and drawbacks of a global economy for the United States? 2.What are the benefits and drawbacks of globalization for people living in underdeveloped countries? continued

Introduction to Business, Business in a Global Economy Slide 25 of 64 Making an Ethical Decision 3.How can underdeveloped countries break into world markets? 4.Should prosperous, industrialized nations monitor labor issues in other countries? If so, how? If not, who should monitor these issues?

Introduction to Business, Business in a Global Economy Slide 26 of 64 Fast Review 1.Give examples of how countries specialize based on the types of resources they have. continued

Introduction to Business, Business in a Global Economy Slide 27 of 64 Fast Review 2.Name types of trade between countries other than imports and exports. 3.Why would a country want to devalue its currency?