IEE test 1

IEE test 1 - IEE 220Engineering and Business Exports...

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IEE 220Engineering and Business **** 1: Business and Economics What Kind of Economy is this ? Identified as Socialist or Communist Government produces most goods and services Examples include North Korea and Cuba Planned Economy What Kind of Economy is This ? Private enterprises produce some goods and services Government produces some goods and services A Mixed Market economy In the US, private enterprise provides 90% of goods and services *What about Pure Market Economies Pure market economies do not exist They only exist in theory Which economic system is best ? *Measuring a Country‘s Economy Gross Domestic Product (GDP) is used GDP Varies greatly by country Per Capita GDP is the GDP per person in a country Per Capita GDP is normalized using a factor called Purchasing Power Parity(PPP) which adjusts for relative prices *Important Trends We must be aware, and respond to trends But, we can‘t predict exactly so we must stay flexible **** 2: Global Business Why Study Global Business ? *Global Business Concepts Comparative Advantage-A country that can produce a good or service better than another country China has lower labor rates than we do We produce food better than most countries Many comparative advantages countries enjoy change over time… ex., labor rates up in China Absolute Advantage-A country that can produce a good or service better than all other countries Diamonds from South Africa It is rare that a country has an advantage over all other countries *Global Business Concepts Exporting-Selling domestically made goods Importing-Buying foreign goods *Balance of Trade Exports -Imports = Balance of Trade *Impact of Exchange Rate-The exchange rate is the value of one currency in another currency *Barriers to Global Trade Can you identify any Cultural barriers ?- Food, clothing, buildings Social barriers ?- Family, education, religion, customs Political barriers ?- *Tariffs and Trade Restrictions Import tariffs-Taxes levied against goods from outside the country-Controls subsidies by exporting countries Quotas-limits quantities imported/exported Embargoes-a total ban on certain imports and exports Usually political initiated *Tariff System Harmonized Tariff Schedule Tariffs (most) are a based on value of imported goods (ranges from 1 -40%)-―Normal Trade Relations- Special preferences *Organizations Facilitating Global Trade- World Trade Organization (WTO) Org. of Petroleum Exp. Countries (OPEC) International Monetary Fund (IMF) *Economic Communities Can you name some economic communities ? EU –European Union NAFTA –North American Free Trade Agreement CAFTA -Central American Free Trade Agreement Why do they exist *Approaches to International Business How can you participate in international business ? Exporting (easiest approach), Licensing, Joint Ventures
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This note was uploaded on 08/25/2011 for the course CHE 113 taught by Professor Burrows during the Spring '11 term at ASU.

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IEE test 1 - IEE 220Engineering and Business Exports...

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