Unit 3 Influence on Business

Explain why the world has become a global economy.
Explain why people and countries specialize in producing goods and services.
Describe free trade
Indicate who benefits and who does not benefit from free trade.

Vocabulary Review
global economy
international trade
multinational corporation
trade
imports
exports
exchange raet
tariff
embargo
free trade

Domestic trade is the production, purchase, and sale of goods and services within a country. Countries do not produce everything their citizens want or need and must trade with other counties. World trade is the exchange of goods and services across internation boundaries. Most nations produce items in which they specialize, thus gaining a comparative advantage. A comparative allows countries to trade their speciality with other countries for other things that they want or need. Items purchases across borders are boughh in the currency used by the country that produced them. Foreign exchange markets allow one country's currency to be converted into another country's currency.