Indicator 6.03

Determine global trade’s impact on business decision-making.

Vocabulary

• Imports• Exports• International trade• Absolute advantage• Comparative advantage

Describe reasons that international trade takes place

List gains from international trade

Identify ways in which the U.S. economy is affected by international trade

Describe types of trade barriers

Explain techniques used by governments to improve international trade relations

Vocabulary

• Exchange rate• Exchange-rate quotation• Free-floating currency• Pegged currency• Foreign-exchange market• Strong/weak dollar• Arbitrage

Distinguish between direct and indirect exchange-rate quotations

Interpret exchange rates

Identify factors that increase demand for currencies

Explain factors that cause a currency to lose value relative to other

currencies

Discuss how economic factors affect exchange rates

Explain how market psychology can affect exchange rates

Describe how political conditions can influence exchange rates

Distinguish between free-floating and pegged currency

Describe factors that influence free-floating currency

Identify institutions that utilize the foreign exchange market

Discuss types of financial instruments used in foreign exchange markets

Explain the advantages/disadvantages of a strong U.S. dollar

Describe the advantages/disadvantages of a weak U.S. dollar

Explain the risks of speculating on the price of foreign currency

Describe Hofstede’s dimensions of national cultures

• Individualism vs. collectivism• Power distance• Uncertainty avoidance• Masculinity vs. feminity

Explain why business subcultures shape the behaviors of businesspeople

Explain how language impacts knowing when and how business will be conducted

Explain how culture influences communication

Discuss how the interrelationship of business law and religion impactsinternational business activities

Identify ways to overcome issues with the crossover of business law and

religion in international business activities

Describe how corruption impacts international business activities

Explain how a country’s level of involvement impacts international trade

Discuss how culture can hamper international trade

Explain how culture can impact trade partner selection

Describe how culture can impact negotiations in international trade

Discuss how culture can impact product delivery in international trade

Explain how positive/negative experiences with a culture can update one’s beliefs

Describe how culture can impact the selection of trade goals in

international trade