The Global Marketplace

The Global Marketplace

Freshman Seminar - Introduction to Business

Mr. HaysNovember 26, 2007

Freshman Seminar - Introduction to Business

Mr. HaysNovember 26, 2007

The Global EconomyThe 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 CorporationsMultinational 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

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International TradeInternational 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 TradeTypes of Trade

• Domestic Trade:– The production, purchase, and sale of of goods and

services within a country– 2001 - 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– 2001 - US International Trade = $434.3 billion

• Domestic Trade:– The production, purchase, and sale of of goods and

services within a country– 2001 - 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– 2001 - US International Trade = $434.3 billion

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Imports and ExportsImports 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

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Balance of TradeBalance 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?

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SpecializationSpecialization

• 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

ReviewReview

• 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?