RSM100Y1 Chapter 4: RSM100 CH4
Document Summary
Exports are domestically produced goods and services sold in markets in other countries (abroad). Imports are foreign-made products purchased by domestic consumers. Firms take advantage of large populations, healthy resources, and rising standards of living abroad that increase foreign interests in their goods and services. Trading increases economic growth by: providing a new market for products and providing access to needed resources. Business decisions to operate abroad depend on the basic factors of production in the other country: the availability, price, and quality of labour, natural resources, capital, and entrepreneurship. Trading with other countries allows a company to spread risk because different nations may be at different stages of the business cycle of development: many companies use international sales to balance lower domestic sales. Companies are attracted to international business because of the size of the marketplace. When firms in developing nations increase their global business, they also increase their ability to reach new groups of customers.
