Unit TwoGovernment and Global Business

Government and Global Business

The Trading GameEach group represents an imaginary

nation with a varied amount of natural resources and technology.

I represent the market and will only purchase finished products that are exactly to my specifications.

The members of the nation with the most money at the end will win a prize.

Unit 2 Vocabulary

BoycottCommon MarketDemocracyDutyEconomic NationalismExpropriationFree-Trade AgreementFree-Trade ZoneHost CountryHome Country

Most-Favored-Nation (MFN)

Political SystemProtectionismQuotaSocial ResponsibilityTax HolidayTotalitarian SystemTrade Embargo

Unit 1 Essential Question

How do governments influence international business?

Amplifying Questions

What are the various What are the various political systems around political systems around the world?the world?

How does the political How does the political environment of a host environment of a host country affect an country affect an international company?international company?

How does the political How does the political environment of the environment of the home country affect an home country affect an international company?international company?

Essential Question 1Government and Global Business

How does politics affect global businesses?

International Business pg. 87-91

Types of Political Systems

Democracy—all citizens take part in making the rules that govern them

Totalitarianism—political control held by one person or a small group

Mixed systems—characteristics of both systems

Political Relationships in Business

Global companies operating in host countries

Global companies’ relationships with home countries

Amplifying Questions

What laws and trade What laws and trade barriers discourage barriers discourage global business?global business?

How can political risk How can political risk disrupt global business disrupt global business activity?activity?

What are the major What are the major types of taxes that types of taxes that governments impose governments impose around the world?around the world?

Essential Question 2Government and Global Business

How do governments discourage global business?

International Business pg. 93-98

Government Activities Influence Business

Laws that protect workers and consumersTrade barriers

TariffsQuotasBoycottsLicensing requirements

Political Risks in International Business

Trade sanctionsExpropriationEconomic nationalismCivil unrest or war

International Taxes

Customs dutySales taxExcise taxPayroll-related taxValue-added tax (VAT)Income taxes

Amplifying Questions

What government What government actions encourage actions encourage global business activity?global business activity?

What U.S. government What U.S. government agencies help reduce agencies help reduce the risk of international the risk of international business?business?

How do tax incentives How do tax incentives encourage global encourage global business?business?

Essential Question 3Government and Global Business

How do governments encourage global business?

International Business pg. 100-104

Encouraging International Business

Free-trade zonesMost favored nation (MFN)Free-trade agreementsCommon markets

Government Protection From International Risk

Export-Import Bank of the United States (Eximbank)

Overseas Private Investment Corporation (OPIC)

Tax Incentives

Corporate tax deduction on income earned by foreign subsidiaries

Double-taxation avoidance treaties