BUSI 604 Chapter Notes - Chapter 4: Foreign Direct Investment, Protectionism, Capital Account
Document Summary
International trade and investment: trading of goods, services, or funding that crosses international borders, can be used to forecast levels and consequences of export and import activities within specific economic, geographic, and political circumstances. National balance of payments: gauge to track the coming and going of international trade dollars. Prevailing thought in terms of international trade theory during the pre-industrial. Capital outflow: net loans or investment overseas. First proposed by adam smith: achieved when a nation is able to produce more output than any other nation. In order to be achieved a nation should specialize, produce, and export only those products where the nation holds an absolute advantage. An individual would not make anything that would cost him less to buy . Says that nations can still benefit from trade even when one trading partner does not have an absolute advantage on any of the products being traded: considers differences in productivity. Factors of production (3: land, labor, capital.