Republic of uzbekistan andijan machine-building institute fundamentals of business management

Fundamentals of international business 
• 
Domestic business is the production, purchase and sale of goods and products within the 
country. International business is a business activity conducted for the purpose of creating, 
transporting and selling goods and services on a global scale. 
• 
A country achieves an absolute advantage when it is able to produce goods and products at 
lower prices than others. 
If a country specializes in the production of more efficient goods and services, it is considered to 
have a comparative advantage. 
• 
Imports are products bought from another country. Exports are goods and products sold to 
other countries. Nations do business with both of them in order to increase the variety of goods 
and services for their consumers. 
• 
Trade balance is the difference between a country's imports and exports. The difference 
between the total payments of the state to other countries and the total income from them is called 
the balance of payments. 
• 
Exchange rate is an indicator of the value of one country's currency compared to another 
country's currency. 
• 
There are 3 main influences on the value of global currencies: balance of payments, 
economic conditions and political stability. 
3-2. World market 
• 
The international business environment consists of 4 main components: geography, 
cultural influences, economic development, political and legal relations. 
• 
3 legal barriers to international trade: quotas, tariffs, and embargoes. 
A quota is a limit placed on the amount of export or import products during a given period of 
time. 
A tariff is a tax imposed on a certain imported product. An embargo is 
a complete stoppage of import and export of a product. 
• 
International 
trade 
encourage in order to 
open 
trade
zones, 
open 
tradeannouncements and common markets will be established. 
3-3. International business organizations 
• 
Multinational companies do business in many countries and have the ability to do 
business on a global scale. 
• 
The main methods used for global business are: licensing, franchising and joint ventures. 
• 
The World Trade Organization was created to promote trade around the world. 
The International Monetary Fund helps maintain the international trading system and the 
exchange rate by keeping it in balance. 
The World Bank provides economic assistance to developing countries. 

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