International Trade

Labor

Labor refers to all of the people who work, full and part-time workers, managers, and people in both private and public sectors.

Capital

Capital includes money to start and operate a business. It also includes the goods used in the production process. 

Entrepreneurship 

Entrepreneurship refers to the skills of people who are willing to invest their time and money to run a business . 

International Trade 

IS the exchange of goods and services among nations:

Example: China, Japan, Europe.

Imports - goods and services purchased from other countries.

Exports - goods and services sold to other countries.

They both are controlled by the government of the countries involved.

Imports (goods and services brought into the U.S.):

1. Electronics and Technology

• Computers and smartphones from China, South Korea, and Japan.

Semiconductors and other advanced tech components from Taiwan.

2. Automobiles and Automotive Parts:

• Cars from Japan, Germany, and South Korea.

• Auto parts from Mexico and Canada.

3. Energy Products:

• Crude all and natural gas from Canada, Saudi Arabia, and Mexico.

4. Consumer Goods:

• Clothing and textiles from Bangladesh, Vietnam, and India.

• Fumituro from China and Vietnam.

5. Pharmaceuticals:

• Medicines/and medical devices from Ireland, Germany, and Switzerland.

INTERNATIONAL TRADE

Is the exchange of goods and services among nations:

Eramples: China, Japan, Europe.

Imports - are goods and services purchased from other countries.

Exports - are goods and services sold to other countries.

They both are controlled by the government of the countries

Exports (goods and services sold abroad by the U.S.):

1. Aircraft and Aerospace:

• Commercial aircraft and aerospace parts to countries like France, China, and Germany.

• Military equipment to allied nations, including Saudi Arabia and Japan.

2. Agricultural Products:

• Soybeans, corn, and wheat to China, Mexico, and Japan

• Meat products (pork, beef) to South Korea and China.

3. Automobiles:

• American-made cars to Canada, Germany, and Saudi Arabia.

4. Technology and Software:

• Cloud computing services, software, and Intellectual property licensing to global markets, including Europe and Asia.

5. Chemicals:

• Industrial chemicals and plastics to Canada, Mexico, and the European Union

BENEFITS OF INTERNATIONAL TRADE

Consumers benefit from the competition that foreign companies offer.

This kind of competition encourages production of high-quality products with lower prices.

Consumers have more options when making purchasing decisions.

Fact

Hewlett Packard, IBM, and H.J. Heinz report that over 50% of their sales are made overseas.

THE ECONOMY AND MARKETING

Productivity - is output per worker hour that is measured over a delined period of time. (Use I's business as an example); by Units.

Inflation - refers to rising prices for the consumers:

What kind of rising prices:

Food, clothing, housing, electronics, automobiles, elc.

High Inflation rate is usually 6-10% or higher in the economy.

Low Inflation rate is usually between 1-5% each year

From the mid 1960's - 1980s the US experienced an enormous inflation rate.

THE BUSINESS CYCLE

Recurring changes in economic activity is referred to as the business cycle which will normally include expansion, recession, trough, and recovery

Expansion - is a time when the economy is flourishing or a period of prosperity

• Low unemployment

• More goods and services are produced and purchased

• Consumers spend a lot of money that fuels the economy

THE BUSINESS CYCLE CONTINUED

Recession - is a period of economic slowdown that lasts for at least TWO QUARTERS of a year.

• Its defined as a significant decline in activity spread across the economy.

• Companies may reduce their workforce

• Means high unemployment

• Ultimately means consumers spend less money

• Fewer goods and services are made

Depression - is a prolonged recession, impossible to find work, no wages, no spending at all, the economy is essentially in a turmoil.

RECOVERY

Recovery - is the term that signifies a period of renewed economic growth following a recession or depression.

Tariffs- is a tax on IMPORTS. They are normally used to increase revenue for a country

Embargo - is a total ban on specific goods coming into and leaving a country-(Example: Chilean Grapes).

LICENSING

Licensing involves letting another company, or licensee, use a trademark, patent. special formula, company name for a fee royalty. (Use lowa Example)

Contract Manufacturing - involves hiring a foreign manufacturer to make products according to a company's specifications

Proprietary information - a product's design and specific patent information.

Con - stealing (knockoffs) someone's design.

Examples: Gucci handbags. designer clothing, Pro athletic clothing

PRIVATE ENTERPRISE

Private Enterprise - is business ownership by ordinary people, not the government. It is also known as free enterprise.

BASIC ELEMENTS OF A FREE ENTERPRISE:

• Freedom to own property

• Freedom to compete

• Freedom to take risks

• Freedom to make a PROFIT

PATENT

A patent is on an invention, you alone own the rights to (Alphalete) that item or idea

Having a Utility Patent means that you have true ownership of it.

BOTH CAN BE VERY EXPENSIVE

Trademark - is a word, name, symbol, sound, or color that identifies a good or service

Copyright - involves anything that is authorized by an individual, such as writings (books, magazines, articles), music, and artwork. The author has exclusive rights