Unit Two Government and Global Business

Government and Global Business The Trading Game Each group represents an imaginary nation with a varied amount of natural resources and technology. I represent the market and will only purchase finished products that are exactly to my specifications. The members of the nation with the most money at the end will win a prize.

Unit 2 Vocabulary Boycott Common Market Democracy Duty Economic Nationalism Expropriation Free-Trade Agreement Free-Trade Zone Host Country Home Country Most-Favored-Nation (MFN) Political System Protectionism Quota Social Responsibility Tax Holiday Totalitarian System Trade Embargo

Unit 1 Essential Question How do governments influence international business?

Amplifying Questions  What are the various political systems around the world?  How does the political environment of a host country affect an international company?  How does the political environment of the home country affect an international company? Essential Question 1 Government and Global Business How does politics affect global businesses? International Business pg

Types of Political Systems Democracy—all citizens take part in making the rules that govern them Totalitarianism—political control held by one person or a small group Mixed systems—characteristics of both systems

Political Relationships in Business Global companies operating in host countries Global companies’ relationships with home countries

Amplifying Questions  What laws and trade barriers discourage global business?  How can political risk disrupt global business activity?  What are the major types of taxes that governments impose around the world? Essential Question 2 Government and Global Business How do governments discourage global business? International Business pg

Government Activities Influence Business Laws that protect workers and consumers Trade barriers Tariffs Quotas Boycotts Licensing requirements

Political Risks in International Business Trade sanctions Expropriation Economic nationalism Civil unrest or war

International Taxes Customs duty Sales tax Excise tax Payroll-related tax Value-added tax (VAT) Income taxes

Amplifying Questions  What government actions encourage global business activity?  What U.S. government agencies help reduce the risk of international business?  How do tax incentives encourage global business? Essential Question 3 Government and Global Business How do governments encourage global business? International Business pg

Encouraging International Business Free-trade zones Most favored nation (MFN) Free-trade agreements Common markets

Government Protection From International Risk Export-Import Bank of the United States (Eximbank) Overseas Private Investment Corporation (OPIC)

Tax Incentives Corporate tax deduction on income earned by foreign subsidiaries Double-taxation avoidance treaties