Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
----------------------------------- CHAPTER 4: Economics and Politics Chapter 4: ECONOMICS AND POLITICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Key Terms political system economic system market economy centrally planned economy mixed economy democracy autocracy underdeveloped countries Chapter 4: ECONOMICS AND POLITICS developing countries developed countries gross domestic product (GDP) business cycle absolute advantage opportunity cost comparative advantage lobbying Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Chapter Objectives By the time you finish this chapter, you should be able to: Evaluate the advantages and disadvantages, in both developed countries and developing countries, with regard to business opportunities Analyze the rationale for, and the impact of, Canadian government initiatives and policies relating to international trade Assess the ways in which political, economic, and geographic factors influence international business methods and operations Describe the roles corporations can play in setting international and domestic policy Chapter 4: ECONOMICS AND POLITICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Economic and Political Systems ____________________ The type of government by which a country is run ____________________ The way a country organizes its resources and distributes goods and services to its citizens. Chapter 4: ECONOMICS AND POLITICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Economic and Political Systems The answers to the following questions define a country’s economic system: 1. What should the country produce and in what quantities? 2. How should _______________such as labor and capital _______________? 3. How should goods and services be distributed throughout the country? 4. What should be the price of the goods and services? Chapter 4: ECONOMICS AND POLITICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Parag Khanna (Geopolitical researcher and political advisor) Do we live in a borderless world? Chapter 4: ECONOMICS AND POLITICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Economic and Political Systems Market economy An economic system determined by ________________, in which businesses, consumers, and government act independently of one another, and market forces and self-interest determine what goods are created and sold. Chapter 4: ECONOMICS AND POLITICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Economic and Political Systems In a market economy: Corporations and people are encouraged to own private property Profit belongs to business _____________ and they can _______how to spend it Companies compete in terms of quality, services, price, reputation, and warranties. Consumers have greater selection and companies have an incentive to _________________. Chapter 4: ECONOMICS AND POLITICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Economic and Political Systems Centrally planned economy An economic system in which the ___________ _____________ all elements of the economy, including prices, wages, and production. Chapter 4: ECONOMICS AND POLITICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Economic and Political Systems In a centrally planned economy: Ownership of property is ________ All profit belongs to the ____________; all workers are employed by the government Competition is _________; government determines price, quality, style, and amount of goods and services Chapter 4: ECONOMICS AND POLITICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Economic and Political Systems Mixed economy An economic system that sits between a _________ economy and a _________ planned economy, combining government intervention and private enterprise. Chapter 4: ECONOMICS AND POLITICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Economic and Political Systems In a mixed economy: Property is owned by individuals, corporations, or government Profit is ___________, but ___________to support government projects and programs Strong competition amongst corporations; government may also be a competitor Chapter 4: ECONOMICS AND POLITICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. ECONOMIES OF THE WORLD Place the flags under the heading that best represents their economy. Command Chapter 4: ECONOMICS AND POLITICS Market Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Mixed Economic and Political Systems Political system The type of ___________ by which a country is run. Chapter 4: ECONOMICS AND POLITICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Economic and Political Systems _________________ A state governed by all eligible members of the population through _______ representatives. Characterized by free and fair _________, the rule of law, free speech and press, the right to assembly, and _________ of religion Politicians may be more concerned with re-election than the good of the country Chapter 4: ECONOMICS AND POLITICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Economic and Political Systems ______________ A state governed by a single individual or a small group of people with ______________ power. Usually has strong ________ presence Strives to control all aspects of citizens’ lives Citizens have no influence on government Chapter 4: ECONOMICS AND POLITICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Classifications of Economic Development _______________countries © iStockphoto.com Also referred to as the _______________________ _________ countries, nations that are at the lowest level of the world’s economies (below the poverty line) Chapter 4: ECONOMICS AND POLITICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Classifications of Economic Development Underdeveloped countries are characterized by: Severe poverty Lack of social services Poor infrastructure Low levels of literacy Limited access to technology Agriculture- or resource-based economies Long-term political issues, such as dictatorships and war Geographically – experience environmental or natural catastrophes Fundamentals of International Business Chapter 4: ECONOMICS AND POLITICS Copyright © 2010 Thompson Educational Publishing, Inc. Classifications of Economic Development Developing countries Used under license from Shutterstock, Inc. Also known as emerging or ____________________, nations in transition from a poor economy to a prosperous one. Chapter 4: ECONOMICS AND POLITICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Classifications of Economic Development ____________countries are characterized by: Improved literacy rates Increased access to health care and other social services, and technological advancement A move away from a resource-based economy to a manufacturing base Population moving from rural areas to cities Chapter 4: ECONOMICS AND POLITICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Classifications of Economic Development _____________countries Also known as industrialized or ________________ ____________, nations that are characterized by a high per capita income or strong gross domestic product (GDP). Chapter 4: ECONOMICS AND POLITICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Classifications of Economic Development Developed countries are characterized by: © iStockphoto.com A reliance on secondary and predominantly tertiary industries, rather than primary industries High standards of living High literacy rates Major advancements in health care and technology World leaders with strong trade alliances Chapter 4: ECONOMICS AND POLITICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Classifications of Economic Development Gross domestic product (GDP) ______________________________ _____________________________. It indicates the STRENGTH of a nation’s economy to help determine it’s goals and development programs GDP per capita Chapter 4: ECONOMICS AND POLITICS = Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Classifications of Economic Development Chapter 4: ECONOMICS AND POLITICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Homework List 10 countries for each economic classification. (Your portfolio country should be one of the them!) P. 118 #19 Chapter 4: ECONOMICS AND POLITICS Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc.