Chapter Assessment - Introduction To Business - ثاني ثانوي

Chapter 3 Review Business Concepts 3.1 International Business Basics Assessment • Domestic business is the making, buying, and selling of goods and services within a country. International business refers to the business activities needed for creating, shipping, and selling goods and services across national borders. A country is said to have an absolute advantage when it can produce a good or service at a lower cost than other countries. If a country specializes in the production of a good or service at which it is more efficient, it is said to have a comparative advantage. • Imports are items bought from other countries. Exports are goods and services sold to other countries. Nations do business with each other to increase the variety of goods and services available to their consumers. Balance of trade is the difference between a country's exports and imports. The difference between a country's total payments to other countries and its total receipts from other countries is the balance of payments. • The exchange rate is the value of a currency in one country compared with the value of a currency in another country. • The value of global currencies is affected by three main factors: balance of payments, economic conditions, and political stability. 3.2 The Global Marketplace • The international business environment involves four main components: geography, cultural influences, economic development, and political and legal concerns. Three formal barriers to international trade are quotas, tariffs, and embargoes. A quota is a limit set on the quantity of a product that may be imported or exported within a given period. A tariff is a tax placed on certain imported products. An embargo stops the import or export of a product completely. Actions to encourage international trade include free-trade zones, free-trade agreements, and common markets. 3.3 International Business Organizations • Multinational companies conduct business activities in several countries and have management capable of doing business worldwide. Common methods used for global business include licensing, franchising, and joint ventures. • The World Trade Organization was created to promote trade around the world. The International Monetary Fund helps to promote economic cooperation by maintaining a system of world trade and exchange rates. The World Bank provides economic assistance to less-developed countries. P106 Chapter 3 | Business in the Global Economy Ministry of Education 2024-1446

Think Critically About Business 1. Describe how an absolute advantage might affect a country's imports and exports. 2. Explain why it is difficult for a community or a nation to be completely independent. 3. How does international business contribute to a better standard of living for many people in various countries? 4. For the following situations, decide whether this is an example of an informal or formal trade barrier. a. Law requiring that stores be closed on Wednesday b. Beliefs about not eating certain foods c. Special tax on the sale of energy drinks d. Required nutritional information on food packaging 5. Describe situations in which a joint venture would benefit a company involved in international business. 6. A country sometimes uses high tariffs to protect its new and developing industries. What are two examples of new and developing industries either in Saudi Arabia or in other countries? Do you think that such industries should be protected by high tariffs? If so, how long should they be protected? 7. Some people believe that a nation should place stiff controls on imports of goods that compete with its businesses to prevent the "exporting of jobs" to other countries. Give arguments for and against such a position. وزارة التعليم Ministry of Education 2024-1446 Assessment | 107

Develop Your Business Language Match the terms listed with the definitions. Term Your Choice Definition 8. balance of payments a. Goods and services sold to another country. 9. balance of trade 10. embargo 11. exchange rate 12. exports 13. imports 14. infrastructure 15. joint venture 16. multinational company i. (MNC) 17. quota j. 18. tariff 19. trade barriers b. A limit on the quantity of a product that may be imported and exported within a given period. C. Government restrictions to reduce free trade. d. An organization that conducts business in several countries. e. The value of money of one country expressed in terms of the f. money of another country. Goods and services bought from another country. g. Stopping the importing or exporting of a certain product or service. h. An agreement between two or more companies from different countries to share a business project. The difference between a country's total exports and total imports of goods. A tax that a government places on certain imported products. k. The difference between a country's total payments to other countries and its total receipts from other countries. I. A nation's transportation, communication, and utility systems. Make Academic Connections 20. Geography Locate examples of multinational companies in different countries. Create a map showing where the companies are based and the other nations in which the companies operate. 21. Economics Go to the website of an economic community (common market) or a regional trade organization. Make a list of the countries involved and describe some of the organization's activities. P108 Chapter 3 | Business in the Global Economy Ministry of Education 2024-1446

22. History Conduct research on the history of money systems that have been used in other countries. Find examples of the use of a country's currency in another country. 23. Math To make their exports suitable for use in other countries, some manufacturers must produce goods that are measured in the metric system. For example, if a manufacturer wanted to export paint, which is sold in gallons in a particular country, it would probably export the paint in 4-liter cans (about 1.4 gallons). To what sizes would the items listed be converted for export to countries using the metric system? a. A quart bottle of liquid detergent b. A 50-yard bolt of fabric c. An automobile engine measured in cubic inches d. A 12-inch ruler e. A bathroom scale that measures in pounds 24. Technology Using a spreadsheet program, create a table and graph to report the changing value of the Saudi Riyal compared with currencies of other countries. 25. Math Using the information in Figure 3-4, determine how many Saudi Riyals someone could buy for these amounts of currencies from other countries. a. In Japan, 1,200 yen b. In Canada, 5 Canadian dollars C. In South Africa, 150 rands وزارة التعليم Ministry of Education 2024-1446 Assessment | 109

26. Career Planning Investigate what types of legal agreements a person might encounter when applying for a job to work for a multinational company in another country. Make Your Case Assume you have started a business that manufactures electric toasters that you want to sell to the people of China. 27. What are some potential difficulties that you might encounter when doing business in the Chinese market? 28. What actions could your company take to help improve your opportunities for success? Interactions and Connections 29. Examine the labels of 10 clothing items you own to collect the following information for each item: description of garment, fabric type and characteristics/features, and country of origin. Use the data to prepare a list or table of your findings. Be prepared to discuss these questions: Which countries appear most often on your list? Are there several countries from the same geographic region? What are some possible similarities among these countries? What are the economic advantages of these countries being involved in clothing manufacturing? 30. The products of Coca-Cola, Kellogg's, General Mills, and other companies are sold in many countries. These businesses often use brand names, logos, or other visuals that are recognized around the world. At the same time, the product or package might need to be adapted to address cultural differences in different countries. ليم 110 Chapter 3 | Business in the Global Economy Ministry of Education 2024-1446

a. Visit the website of a company that produces a popular product and locate information about its international operations. Obtain information about a product sold in several countries. Describe to the class how the company adapted the product or packaging in another country. Illustrate your talk with images from the website. b. Locate a website with information about the culture of a country. Write a paragraph describing an element of the culture that the company might need to consider when doing business in that country. C. Share the information you discovered in your research with a family member or friend. Ask the person for reactions about the company's global business activities. Emerging Business Issues Event In many countries around the world, one of the most striking changes in food and retailing over the past two decades has been the rise of private labels, also known as store brands. The term private label describes products manufactured for sale under a specific retailer's brand. They are often designed to compete against branded products, offering consumers a cheaper alternative to national brands. Though they were once considered knock-offs of name brands or even generic "no-name brands," private labels have become increasingly accepted by the public. Many consumers now consider private labels as acceptable alternatives to national brands. Private labels offer many benefits to both retailers and customers, driving the segment's rising popularity. Each team of two or three members must conduct research to gather facts regarding private labels and the impact they have on retailers and consumers. Students should brainstorm the benefits and drawbacks of private labels to both retailers and customers. Teams also should give examples of the most successful private label brands. Teams will be permitted to bring prepared materials, written or printed, on white 8½" by 11" paper or note cards. One 4" by 6" index card will be given to each participant and may be used during the preparation and presentation. Each presentation may last no more than five minutes. Following each oral presentation, judges may conduct a five minute question and answer period during which the presenters should be prepared to defend their research. Performance Indicators Evaluated Demonstrate sound research with the information gathered. Present the rationale in a clear and logical manner. Provide supporting information for each point made. • Choose examples that are relevant to the audience. You Will Be Evaluated on • Organization of your oral presentation. Rationale of your presentation. • Speaker responded to questions fully, knowledgeably, and without hesitation. Think Critically 1. What can name brands do to compete with private labels? 2. How do private labels differentiate themselves from national brands? وزارة التعليم Ministry of Education 2024-1446 Assessment | 111