The Global Marketplace Freshman Seminar - Introduction to Business Mr. Hays November 26, 2007 Freshman Seminar - Introduction to Business Mr. Hays November 26, 2007

The Global Economy What is it? –The interconnected economies of the nations of the world –Fueled by international trade What is international trade? –The exchange of goods and services between nations What is it? –The interconnected economies of the nations of the world –Fueled by international trade What is international trade? –The exchange of goods and services between nations

Multinational Corporations Definition –A company that does business in many countries –Has facilities and offices around the world –Researching the web: Find the four largest multinational corporations in 2000 Definition –A company that does business in many countries –Has facilities and offices around the world –Researching the web: Find the four largest multinational corporations in 2000

International Trade Has several meanings –Research the web and find at least three business definitions for trade The activity of buying and selling goods and services in a domestic or international market Why have international trade? –Allows countries to meet their individual wants and needs Has several meanings –Research the web and find at least three business definitions for trade The activity of buying and selling goods and services in a domestic or international market Why have international trade? –Allows countries to meet their individual wants and needs

Types of Trade Domestic Trade: –The production, purchase, and sale of of goods and services within a country – US Domestic Trade = $3.2 Trillion Wal-Mart - $202 billion Home Depot - $53.5 billion Kroger - $50 billion Target - $39.2 billion Sears - $37.3 billion World Trade: –Exchange of goods and services across international boundaries – US International Trade = $434.3 billion Domestic Trade: –The production, purchase, and sale of of goods and services within a country – US Domestic Trade = $3.2 Trillion Wal-Mart - $202 billion Home Depot - $53.5 billion Kroger - $50 billion Target - $39.2 billion Sears - $37.3 billion World Trade: –Exchange of goods and services across international boundaries – US International Trade = $434.3 billion

Imports and Exports What are Imports? –Goods or services that one country buys from another country What are Exports? –Goods or services that one country sells to another country Web Research: Find the number one U.S. import and export What are Imports? –Goods or services that one country buys from another country What are Exports? –Goods or services that one country sells to another country Web Research: Find the number one U.S. import and export

Balance of Trade What is a trade balance? –The difference in value between a country’s imports and exports over a period of time –Does the US have a trade deficit or surplus? What is a trade balance? –The difference in value between a country’s imports and exports over a period of time –Does the US have a trade deficit or surplus?

Specialization Builds and sustains a market economy Countries specialize in producing certain goods and services Builds comparative advantage for countries –The ability of a country or company to produce a particular good more efficiently than another country or company Builds and sustains a market economy Countries specialize in producing certain goods and services Builds comparative advantage for countries –The ability of a country or company to produce a particular good more efficiently than another country or company

Review What is a global economy? What is the difference between domestic and international trade? How do countries build comparative advantage? What is a global economy? What is the difference between domestic and international trade? How do countries build comparative advantage?