AFM131 Lecture Notes - Automotive Products, Comparative Advantage, Free Trade

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AFM131 Full Course Notes
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AFM131 Full Course Notes
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Part 1 business trends: cultivating a business in diverse global environment. Global trade = enables a nation to produce what it is capable and buy what is needed in a mutually beneficial exchange relationship. Domestic workers can job = increased imports or production shifts to low- wage global markets lose their. Workers = forced to accept pay cuts producing at their comparative advantage. Competition & less-costly imports keep prices down, so inflation does not affect economic growth. Uninterrupted flow of capital = access to foreign investments = keeps interest rates low. Moving operations overseas = intense competitive pressure. Lost of comparative advantage for local companies = when competitors can produce high quality product with low prices. Free trade = the movement of goods and services among nations without political and economic obstruction. Comparative advantage theory = suggested by david ricardo in the early 19th centrury.

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