Chap 3: Doing business in global market.

Structure:
1. The dynamic global market
2. Getting involved in GB
3. Strategies for reaching GB
4. Forces affecting trading in GB
- Definitions:
o Importing: buy from another country
o Exporting: sell for other countries.
o Free trade: the movement of Goods and services without political or
economic barriers
- Why trade with other nations?
o Produce most capable products
o Buy Needed products
o Mutual benefits
- Pros and cons of free trade:
o Pros
 More customers
 Make countries better off
 Innovation (compete + new products)
 Reduce inflation
 Better interest rates
o Cons
 Less job for domestic workers
 Lower wage
 Move operation overseas (service jobs downs, white-collar jobs
ups)
 Lose local comparative ads
Comparative advantage theory
1. The dynamic global market
a. Comparative advantage theory
i. A country sells products that they can produce more than
others
b. Absolute theory (based mainly on natural resources)
i. Produce more efficiently than all others