RSM100Y1 Lecture Notes - Lecture 14: International Trade, Absolute Advantage, Devaluation
31 Mar 2016
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Document Summary
When their home markets and business slow, companies know the importance of expanding to other countries. Internaional trade is vital to a business and its home country. Trading with other countries increases economic growth in two ways: providing a new market for products, providing access to needed resources. Companies can : expand their markets, seek growth opportuniies in other naions, make their producion and distribuion systems more eicient. A business decision to operate in another country depends on the basic factors of producion in the other country: the availability, price, quality of labour, natural resources, capital, entrepreneurship. Companies are atracted to the internaional market because of its size. Are atracted to places like china and india. But people alone do not create a market, they need to have purchasing power. Few countries can produce all the goods and service they need. For year"s countries have been trading to meet consumer demands.
