11.16.10 - 11.16.10 Globalization The Dynamic Global market...

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11.16.10 Globalization - The Dynamic Global market Importing – buying products from another country Exporting – selling products to another country - Why Trade with Other Nations? Free trade – movement of goods and services among nations without political or economic barriers Theories of Comparative and Absolute Advantage Comparative advantage theory – theory that states a country should sell to other countries those products that it produces most effectively and efficiently, and buy from other countries those products that it cannot produce as effectively or efficiently Absolute advantage – advantage that exists when a country has a monopoly producing a specific product or is able to produce it more efficiently than all other countries - Getting Involved in Global Trade Importing Goods and Services Exporting Goods and Services Measuring Global Trade Balance of trade – total value of a nation’s exports compared to its imports measured over a particular period Trade surplus – favorable balance of trade Occurs when the value of a county’s exports exceeds that of its imports Trade deficit – unfavorable balance of trade
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11.16.10 - 11.16.10 Globalization The Dynamic Global market...

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