1. Ch. 10 Global Economy 10.1 The Global Marketplace Objectives:
Explain why the world has become an global economy
Explain why people and countries specialize in producing goods and services

2. The Global Economy
Global economy: the interconnected economies of the nations of the world.
International Trade: Involves the exchange of goods and services between nations
The development of the global economy is often called globalization
Multinational Corporation: A company that does business in many countries and has facilities and offices around the world.

3. International Trade
Trade: an exchange of goods and/or services for money/goods/services
Types of trade:
Domestic: the production, purchase, and sale of goods and services within a country.
Imports: goods and services that one country buys from another country
Exports: goods and services that one country sells to another country

4. Balance of Trade
Balance of Trade: the difference in value between a country’s imports and exports over a period of time
Deficit: imports greater than exports
Surplus: exports greater than imports
Do you think the United States has a trade deficit or trade surplus?

5. Specialization
Specialization: to focus on a particular activity, area, or product.
Bakeries make baked goods
Auto mechanics work on automobiles
Specialization builds and sustains a market economy
Comparative advantage: the ability of a country or company to produce a particular good more efficient than another country or company
Comparative advantage helps improve the standard of living for each country

6. Currency
Exchange Rates: the price at which one currency can buy another currency.
Exchange rates change from day to day
The amount a country’s currency is worth depends on how many other countries want to buy its products
Companies follow exchange rates to find the best prices for products
How do you think this works?

7. Homework Type out all definitions for Ch. 10
Complete 10.1 Reading Activity and Graphic Organizer