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CHAPTER 1 - Learning Objectives 1. What is international business? 2. What are the key concepts in international trade and investment? 3. How does international business differ from domestic business? 4. Who participates in international business? 5. Why do firms internationalize? 6. Why study international business? QUESTION • International business is defined as the performance of ________ activities by firms across national borders. • A) marketing and fiduciary • B) trade and investment • C) finance and operational • D) manufacturing and sales The Nature of International Business • What are examples of VALUE-ADDING ACTIVITIES? What is the VALUE CHAIN? All value-adding activities—including sourcing, manufacturing, and …show more content…

Much of the difference in the growth of exports versus GDP is due to advanced (or developed) economies, such as Britain and the United States, now sourcing many of the products they consume from low-cost manufacturing locations, such as China and Mexico. For example, although the United States once produced most of the products it consumed, today it depends much more on imports. Rapid integration of world economies is fueled by such factors as advances in information and transportation technologies, decline of trade barriers, liberalization of markets, and the remarkable growth of emerging market economies. QUESTION Which of the following best explains why export growth has outpaced the growth of domestic production during the last few decades? • A) Both world exports and domestic production have grown significantly over the past 30 years. • B) The cost to import products is generally higher than the cost to produce domestic products. • C) Growth in gross domestic product in most countries has steadily increased since 1970. • D) Advanced economies now source many of their consumable products from low-cost manufacturing nations. Foreign Direct Investment (FDI) Inflows into World Regions (in Billions of U.S. Dollars per Year) This exhibit illustrates the dramatic growth of FDI into various world regions since the 1980s. The exhibit reveals that the dollar volume of FDI has grown immensely since the

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