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The Global Marketplace

3-2. The Global Marketplace. Goals Describe the components of the international business environment. Identify examples of formal trade barriers. Explain actions to encourage international trade. Key Terms. infrastructure trade barrier quota tariff embargo.

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The Global Marketplace

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  1. 3-2 The Global Marketplace Goals Describe the components of the international business environment. Identify examples of formal trade barriers. Explain actions to encourage international trade.

  2. Chapter 3 Key Terms • infrastructure • trade barrier • quota • tariff • embargo

  3. Chapter 3 INTERNATIONAL BUSINESS ENVIRONMENT • Geography • Cultural influences • Economic development • Literacy level • Technology • Agricultural dependency • Political and legal concerns

  4. Chapter 3 • location • climate • terrain • waterways • natural resources • technology • education • inflation • exchange rate • infrastructure GEOGRAPHY ECONOMICS INTERNATIONAL BUSINESS ENVIRONMENT • language • family • religion • customs • traditions • food CULTURE • government system • political stability • trade barriers • business regulations POLITICAL–LEGAL FACTORS Elements of International Business Environment

  5. Checkpoint >> List the four main elements of the international business environment. Chapter 3 Answer • geography • cultural influences • economic development • political and legal concerns

  6. Chapter 3 INTERNATIONAL TRADE BARRIERS • Quotas • Tariffs • Embargoes

  7. Chapter 3 QUOTAS Reasons for quotas • To keep supply low and prices the same • To express displeasure at the policies of the importing country • To protect one of a country’s industries from too much competition form abroad

  8. Chapter 3 TARIFFS Reasons for tariffs • To set amount per pound, gallon, or other unit • To set the value of a good

  9. Chapter 3 EMBARGOES Reasons for embargoes • To protect a country’s industries from international competition more than the quota or tariff will achieve • To prevent sensitive products from falling into the hands of unfriendly groups or nations

  10. Checkpoint >> What are three formal trade barriers? Chapter 3 Answer • quotas • tariff s • embargoes

  11. Chapter 3 ENCOURAGING INTERNATIONAL TRADE • Free-trade zones • Free-trade agreements • Common markets

  12. Chapter 3 FREE-TRADE ZONES • Used to promote international business in a selected area where products can be imported duty-free and then stored, assembled, and/or used in manufacturing • Usually located around a seaport of airport

  13. Chapter 3 FREE-TRADE AGREEMENTS • Member countries agree to remove duties and trade barriers on products traded among them • Results in increased trade between members

  14. Chapter 3 COMMON MARKETS • Allows companies to invest freely in each member’s country • Allows workers to move freely across borders • Examples • European Union (EU) • Latin American Integration Association (LAIA)

  15. Checkpoint >> What actions could be taken to encourage international trade? Chapter 3 Answer • Actions that could be taken to encourage international trade include free-trade zones, free-trade agreements, and common markets.

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