chapter 6 - L O1) Globalization is a process which allows...

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LO1) Globalization is a process which allows products, information, and services to be sent to other countries by ways of advanced technology. Some factors that aid in this process are; Globalization of production- this term is also known as offshoring. Companies take advantage of the different production qualities of other countries, such as lower costs or production, and labor. This is why some businesses relocate their manufacturing. This also provides an opportunity to offer their products in these new areas. International Monetary Fund- Established along with GATT, its primary purpose was to promote international monetary (money) cooperation to assist in. trade and growth. General Agreement on Tariffs and Trade (GATT) - The purpose of this organization is to restrict the amount of products being imported, and reducing trade tariffs, to ensure that products can flow easily between countries. World Trade Organization- WTO replaced GATT in the early 1990’s. Their main function is dealing with global rules of trade among the different nations. They try to maintain the free flow of trade to ensure it is running smoothly. Their other responsibilities include trade negotiations and agreements, settling trade disputes, reviewing policies, and helping countries that are new to trading develop a policy. World Bank Group- this banks works towards fighting poverty, and improving living conditions in developing countries. They provide low interest loans to lower class countries and offer knowledge and technical assistance. LO2) a firm decides to enter a global market by making a market assessment. There are four steps, which help determine a countries potential for a market or service. Step 1-Economic analysis Evaluating the general economic environment- A firm must evaluate how healthy a countries economy is, and its potential. This can be done is several ways, some better than others. -Measuring imports and exports. Some countries are in a trade deficit, which mean that they are importing more than they are exporting. The opposite of that is a trade surplus, which is when the country exports more than it imports. This is a more desirable
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trait in a country, because if they relocate there, then they have a better chance at exporting their products to other countries. Gross domestic product (GDP) - measures the value of goods and services produced in a year’s time. Gross national income (GNI) - GDP and the net income are combined, and then
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chapter 6 - L O1) Globalization is a process which allows...

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