Cap. 3 Busn

Review Cap. 3 Busn

1. What countries represent the largest global business opportunities for the next decade? What factors determine the size of the opportunity.
a. China, India, the EuropeanUnion, USA, Indonesia, and Brazil. The factors that determine the size of the opportunity are the size of the population, GDP, GDP growth rate and growing number of people with cell phones and access toany kind of phone.
2. Why do companies tend to thrive in global markets when their country of origin enjoys a comparative advantage in their industry?
a. They tend to thrive because even though thecountry of origin as comparative advantage in that industry, that probably means that there are more companies in that industry in the country of origin and that means that the second best choicesuffers more in the country of origin. So companies that go to another market thrive because it has less competition and can produce more of a product because it has the same resources but lesscompetition using it. This will allow them to gain an absolute advantage.
3. Explain how to calculate the balance of trade. How does the growing United States trade deficit impact the economy? Why?
a.Balance of trade is calculated by subtracting a nations imports from its exports. The United States trade deficit impacts the economy because that means that it is importing more goods and services thanit is exporting, therefore there is less money for the nation to spend to produce products for exporting as well as other government projects.
4. Explain the meaning of “strong” currency and “weak”currency. What are the advantages and disadvantages of each?
a. Strong currency means that a country’s currency value is stronger that another country’s value when compared side by side and thereforehas more strength against other currencies. Weak currency is when a nation’s currency value is weaker than another countries currency value when compared side by side. The advantage of having strong...