student target: be able to define multinational corporations and identify their products as imports...
TRANSCRIPT
Student Target: be able to define multinational corporations and identify their products as imports or exports.
Why Global?1. Profit!!2. Changes in the domestic market3. New or larger markets in other countries4. Lower production costs abroad5. Treaties or trading blocs
Imports & ExportsSelling products or services to buyers in
another country is known as: _____________
____________ refers to buying goods and services made in a foreign country.
How is a product deemed an import or export if parts are made in several different countries?If _____% of the product is made in the U.S. it can
be labeled “Made in the U.S.A.”
IMPORT
EXPORT
51
Import or Export?1. Boeing (U.S.) makes and sells planes to Qantas (Australia)
AirlinesImport for Qantas/Australia; Export for Boeing/U.S.
2. CDW (U.S.) purchases Acer (Taiwan) laptops.Import for CDW/U.S.; Export for Acer/Taiwan
3. Mitsubishi Endeavors sold to car dealerships in Tokyo.Import for Car Dealerships/Japan; Export for Mitsubishi/U.S.
Governmental Policies on Int’l Business1. Tariffs: taxes placed on foreign goods
Ex: U.S. places a 10% tariff on foreign jeans. $30 jeans now cost: $33
2. Dumping: selling goods in a foreign market below cost or below the cost in their home country to drive out competitors (like a retail store using a loss leader).
3. Quota: places limits on the number of products that can enter
4.Embargo: no products allowed/acceptedExample?
Foreign CurrenciesExchange rate: value of one country’s currency
expressed in the currency of another country.$1US = ¥125 (Jap.Yen). A 12,500 ¥ camera in
the U.S. would cost:If exchange rate changes to ¥ 100 camera in U.S.
now costs:
$100
$125
World CurrenciesYen ¥
JapanDollar
U.S. Dollar, Canadian Dollar, Australian Dollar, New Zealand Dollar
RealBrazil
YuanChina
FrancSwitzerland
Pound £U.K.
RandSouth Africa
RupeeIndia
PesoArgentine Peso,
Mexican PesoEuro €
Germany, Italy, Netherlands, France, Spain
Treaties & Trading BlocsTreaties:
WTO: enforces rules governing international trade
NAFATA: free trade among U.S., Mexico and CanadaU.S. signed it originally with just….
EU: 27 European countriesWhy? Removes traiffs, encourages trade with the free
movement of people, goods and capital.Bulgaria and Romania recent additions in 200718 of 27 nations have adopted the Euro as their
currencyU.K.?
Canada
Balance of TradeImports vs. Exports
Imports exceed Exports = Trade deficit (negative)
Exports exceed Imports = Trade surplus (positive)