IBT Lecture Pasafd

IBT 3BSA-5
GOALS D. Economic Conditions

a. Type of Economic System
 Describe basic international activities b. Education Level
 Explain the components of international c. Type of Industries
business environment
 Name important skills for international business INTERNATIONAL BUSINESS SKILLS
 Describe the importance of international
business for workers, consumers, and citizens  History – your awareness of the past can help you
better understand today’s international business
FUNDAMENTALS OF INTERNATIONAL BUSIESS TRADE relations.
 Geography – knowledge of geography will help you
 When a country has an abundance of goods or understand how the climate and the terrain of the
services, businesses look for trade opportunities. country can affect the transportation, housing, and
other business activities.
Two Sides of Trade Activity  Foreign Language – your ability to communicate
 Import – products that are bought from effectively with people from other societies
businesses in other countries increases in importance.
 Export – products sold in other countries  Cultural Awareness – understanding that cultures
vary from nation to nation allow people to be more
TRADE BARRIERS sensitive to customs and traditions of all societies.
 Study Skills – asking questions, taking notes, and
 These are restrictions that reduce free trade doing research are the tools necessary to keep up to
among countries. date on changes in international business.
 Import Taxes – increase the cost of foreign

products
 Quotas – restrict the number of imports
 Laws – prevent certain products from coming
into country
THE INTERNATIONAL BUSINESS ENVIRONMENT
 Buying and selling goods and services is similar in

most parts of the world. That is, consumers try
to satisfy their needs and wants at a fair price
and businesses try to sell products at a price that
covers cost and provides a fair profit.
INTERNATIONAL BUSINESS ENVIRONMENT FACTORS
A. Geographical Conditions
a. Climate
b. Terrain
c. Seaports
d. Natural Resource
e. Agricultural Products
B. Culture and Social Factors

a. Language
b. Education
c. Religion
d. Values and Customs
e. Social Relationships
C. Political and Legal Factors

a. Type of Government
b. Political Stability
c. Government Policies towards Business
i. Regulation of Fair Advertising
ii. Enforcement of Contracts
iii. Safety Inspection of Food and
Medication
IBT 3BSA-5
GOALS 2.3 ECONOMIC SYSTEM
 Describe basic economic problem Basic Economic Problem – satisfying unlimited needs
 Enumerate the steps of the decision-making and wants with limited resources.
process
 Describe how the market sets prices Factors of Production
 Explain the causes of inflation  Natural Resources
 Enumerate the factors of production  Human Resources
 Understand how different countries make  Capital Resources
economic decisions
 Describe the factors that affect economic Type of Economic Systems – Every nation decides how
development to use its factor of production to create goods and
 Identify the levels of economic development services for its people.
 Discuss economic principles that explain the
need for international trade Three Basic Questions
 Identify various measures of economic progress  What goods and services are to be produced?
and development  How should the goods and services be
produced?
2.1 ECONOMICS AND DECISION MAKING  For whom should the goods and services be
produced?
The Basic Economic Problems
 Scarcity – refers to the limited resources Economic System – is the method a country uses to
available to satisfy the unlimited needs and answer the basic economic questions.
wants of people
 Economics – the study of how people choose to Three Types of Economic System
use limited resources to satisfy man’s unlimited  Command Economies
wants and needs  Market Economy or Free Enterprise
 Mixed Economies
Making Economic Decisions – People and countries cope
with the scarcity by making decisions. 2.4 ACHIEVEING ECONOMIC DEVELOPMENT
The Decision-making Process Development Factor

1. Define the problem.  Literacy Level
2. Identify the alternative.  Technology
3. Evaluate the alternative.  Agricultural Dependency
4. Make a choice.
5. Take action on the choice. Types of Development
6. Review the decision.  Industrialized Countries
 Less-developed Countries
2.2 BASICS OF ECONOMICS  Developing Countries
Price is one of the visible economic factor you encounter

every day. Daily economic decisions made by the
consumers, business, and government affects us in many
ways.
 Determining the price involves two main
elements: the supply and demand.
o Supply – the relationship between good
and services that business are willing
and able to make available and the price.
o Demand – the relationship between the
amount of good and services that
consumers are willing and able to
purchase and the price.
 Price – constantly change
Inflation – increase in the average prices of goods

and services in a country.
Two Cases of Inflation

 Demand-pull inflation
 Cost-push inflation

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IBT 3BSA-5

GOALS D. Economic Conditions

 Import Taxes – increase the cost of foreign

THE INTERNATIONAL BUSINESS ENVIRONMENT

 Buying and selling goods and services is similar in

INTERNATIONAL BUSINESS ENVIRONMENT FACTORS

B. Culture and Social Factors

C. Political and Legal Factors

The Decision-making Process Development Factor

Price is one of the visible economic factor you encounter

Inflation – increase in the average prices of goods

Two Cases of Inflation

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