Chapter 4 Economic Systems and Market Methods.pptx

Economic Systems and Market Methods

1. International Business Sixteenth Edition, Global Edition Chapter 4 Economic Systems and Market Methods Copyright © 2018 Pearson Education Limited. All Rights Reserved.

2. Learning Objectives 4-1 Explain the value of economic analysis 4-2 Differentiate the types of economic environments 4-3 Explain the idea of economic freedom 4-4 Differentiate the types of economic systems 4-5 Interpret indicators of economic development, performance, and potential 4-6 Profile elements of economic analysis

3. Economic Systems and IB Objective 4-1 Principles used to assess economic environments System Complexity Market Dynamism Market Interdependence

4. Economic Factors Affecting Business Objective 4-1 Figure 4.2 Economic Factors Affecting International Business Operations

5. Types of Economic Environments Objective 4-2 Types of economics Developed Developing Economies in transition(fragile political institutions, heavy indebtedness, poorly performing markets, and ongoing conflict ) Degrees of development

6. Forces Affecting Degrees of Development Objective 4-1 Table 4.2 Moderators of Economic Development

7. Emerging Economies Objective 4-2 Map 4.1 Emerging Economies of the World

8. Economic Freedom Objective 4-3 What is economic freedom? Economic Freedom Index

9. Chart on Economic Freedom and Standard of Living Objective 4-3 Figure 4.4 Economic Freedom and the Standard of Living Source: Adapted from Terry Miller and Anthony Kim, “Why Economic Freedom Matters | 2015 Index of Economic Freedom Book.” 2016. Accessed April 15. http://www.heritage.org/index/book/chapter-2. Used by permission. Note: GDP is adjusted for PPP.

10. Economic Freedom Classifications Objective 4-3 Table 4.4 Economic Freedom: Classification and Characteristics Source: Adapted from “Methodology | 2015 Index of Economic Freedom Book.” Accessed December 8, 2015. http://www.heritage.org/index/book/methodology.

11. Map of Economic Freedom Objective 4-3 Map 4.2 The Presence and Prevalence of Economic Freedom Source: Terry Miller and Kim Holmes, 2016 Index of Economic Freedom , (Washington, DC: The Heritage Foundation and Dow Jones & Co., Inc., 2016).

12. Types of Economic Systems Objective 4-4 Why is the understanding of economic systems important in IB? Market economics Command economies Mixed economies

13. Chart Explaining Economic Systems Objective 4-4 Figure 4.5 Types of Economic Systems

14. Assessing Economic Development, Performance, and Potential Objective 4-5 Ways to measure an economy Monetary GNI (Gross National Income) GDP (Gross Domestic Product) GNP (Gross National Product)

15. Improving Economic Analytics Objective 4-5 Other economic analytics Rate of economic growth Population size Purchasing Power Parity Shadow economies

16. The Ten Largest Economies Objective 4-5 Table 4.7 The 10 Largest Economies, GDP Adjusted for Purchasing Power Parity, 2014 Source: World Bank Development Indicators 2015.

17. Sustainability in Economies Objective 4-5 Green Economies Sustainability Net National Product (NNP) Genuine Progress Indicators (GPI) Human Development Index (HDI)

18. Key Components of Economic Analysis Objective 4-6 Table 4.8 Key Components of Economic Analysis

19. Profile Elements of Economic Analysis Objective 4-6 Other elements of economic analysis for IB managers to consider GCI (Global Competitiveness Index) GII (Global Innovation Index) WCI (World Competiveness Index)