• Western Governors University

• FVC 1   Global Business

C2 THE EVOLUTION OF INTERNATIONAL BUSINESS
 Trade = sale and purchase of goods and services across
national borders.
 Benefits of international trade:
 More choice in goods of services
 Lower prices
 Higher living standards
 Generates jobs in both import and export sectors
 Foreign Direct Investment or FDI – Inflows of capital from
abroad for investing in plants and equipment for the
production of goods and/or services and for buying domestic
firms.
 Theories of international trade
 Mercantilism – a nation can only gain from external
trading when running a trade surplus/by exporting more
than importing. Accumulation of gold and silver by way
of exportation was the only way for countries to
become wealthy. Encourages large families to get
cheap labor. Focuses on accumulation of wealth, not
wellbeing of citizens.