Chapter 15 - Chapter 15 The Global Environment World...

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Chapter 15 The Global Environment World Economy Today Triad – three largest markets in the world. Consists of USA, Japan, and the European Union. Quad – triad plus Canada Quad accounts for 66% of the world’s GDP Emerging Markets Four tigers – Hong Kong, republic of China (Taiwan), Singapore, and South Korea o Also known as the Newly Industrialized Countries (NICs) o Also known as the Newly Industrialized Economies (NIEs) because Taiwan is not technically its own country, it is a rebel state of China o Became powerful using an export promotion growth strategy, which is when an economy relies on exports as its main source of growth Latin America o Used import-substitution growth strategy, in which countries try to stimulate their economy by encouraging domestic manufacturing by raising barriers to imported goods. o Has proven to be less successful in the long term o Brazil – computer import ban makes prices higher in general o Realized in the 1980’s that it wasn’t really working, changed to exports in the 1990’s and became a thriving market Soviet Union o Former soviet countries became a new market with the fall of the USSR o Russia still dominates most of the new nations in the region politically and economically o 15 countries created by the collapse of the USSR are known as the Newly Independent States (NIS) China and India are also important emerging markets India is now the second largest computer software exporter in the world Foreign Exchange Market International businesses constantly need to exchange one currency for another to pay for goods There are two types of exchange rate systems: Flexible and Fixed Flexible Exchange System o Used by those with solid free-market economic systems o U.S., Japan, Canada, the United Kingdom, and Switzerland o Create some problems for businesses because they can fluctuate wildly Fixed Exchange System o Government promises that it will hold the value of its currency fixed relative to some major currency
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Chapter 15 - Chapter 15 The Global Environment World...

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