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International Business 9.3

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1.

9.3Theories of International Trade and Investment

  • GOALS
  • Explain two theories of international trade.
  • Discuss the concepts of balance of payments and current accounts.
  • Consider career opportunities in international business and understand the factors related to being sent abroad on assignment.
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2.

2 Theories of International Trade

3.

Comparative Advantage Theory

  • states that to gain a trade advantage, a country should specialize in products or services that it can provide more effieciently than other countries
  • Brazil=coffee
  • India=tea
  • U.S.=computers
  • Soudi Arabia=oil
  • Indonesia=athletic shoes
Photo by Daniel Dudek-Corrigan
4.

Product Life Cycle Theory

  • states that companies look for new markets when products are in the maturity and decline stages
  • 4 Stages: Introduction, growth, maturity, and decline
  • Black and White TV's
Photo by x-ray delta one
5.

What are the 2 theories?

Explain them.
6.

Balance of Payments

7.

Balance of Payments

  • all international transactions are recorded in an accounting statement
  • has 2 parts
Photo by tadfad
8.

Current Account

  • records the value of goods and services exported and those imported from foreigners, as well as other income and payments
Photo by NatureNerd (probably outside)
9.

Capital Account

  • records investment funds coming into and going out of a country
  • Includes: bank loans, deposits, purchase and sale of a business, and investing in a new business
Photo by fatboyke (Luc)
10.

Page 237

  • Figure 9-6
Photo by JonathanCohen
11.

Explain the difference between current and capital

accounts.
12.

Career Opportunities in International Business

13.

FYI

  • International business has created over 150,000 jobs for Americans to work abroad
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14.

Careers

  • exporting/importing, teaching/translating languages, administering trade laws, managing offices and operations in foreign countries, banking and insurance firms
  • WTO, IMF, federal and state government agencies
Photo by CSIS: Center for Strategic & International Studies
15.

Skills

  • knowledge of business
  • foreign-language ability
  • familiarity with foreign countries or foreign culture
Photo by _assbach
16.

Employment of International Managers

  • Adaptability
  • Socially Flexible
  • Receptive to new ideas
  • Lanuage
  • Self-Confidence
  • Motivation to live abroad
  • Innovative problem solving
Photo by Keith Allison
17.

Difficulties

  • Culture shock
  • Women
Photo by alamosbasement
18.

Describe the skills international managers need to

be successful.

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