Managerial Economics and Strategy, 2/e

17 Global Business

Traditionally, most imports come from other countries.

Learning Objectives

1. Use the concept of comparative advantage to explain why countries trade.

2. Characterize the effects of a change in the exchange rate on trade between countries.

3. Describe the effects of tariffs, quotas, and subsidies on international markets.

4. Show how multinational enterprises take advantage of international tax rate differences to raise profits.

5. Discuss why firms outsource production to foreign firms, and evaluate the criticisms of outsourcing.

Managerial Problem Responding to Exchange Rates

Business is now global. Virtually every country in the world exports and imports goods and services and invests in assets in other countries. Most major corporations ...