International Business Factors - Lesson Summary
Economic factors are those factors that affect the economy, and they include interest rates, tax rates, law, policies, wages, inflation rate, demand and supply, exchange rates, and governmental activities.
A country’s economic policies are the leading indicator of the government’s goals and its planned use of economic tools and market reforms.
The Gross Domestic Product is the total market value of all final goods and services currently produced within the domestic territory in a year. It measures the market value of the annual output of goods and services currently produced and counted only once to avoid double counting.
The Gross National Product is the market value of all final goods and services produced in a year, and it includes the net factor income from abroad.
The Net National Product at market price is the value of all final goods and services after providing for depreciation.
The Gross National Income refers to the income generated both by the total domestic production and the international production activities of national companies. It also refers to the value of all the products in the domestic economy plus the net flows of factor income from abroad within one year.
The Human Development Index is used to rank countries based on human development. It includes indicators such as life expectancy, per capita income and education.
Inflation refers to the sustained rise in prices that are measured against a standard level of purchasing power as a result of aggregate demand growing faster than aggregate supply.
The unemployment rate refers to a share of unemployed workers seeking compensation relative to the total civilian labor force in an economy.
The concept of the income distribution estimates the proportion of the population that earns various levels of income.
The Gini index is a measure of statistical dispersion intended to represent the income or wealth distribution of a nation’s residents, and it is the most commonly used measurement of inequality.
Labor costs are an important tool for understanding the relationship between work and the economy and they can give an indication of the relative cost of doing business in various locations.
Productivity measures the efficiency with which goods and services are produced. It can be used to forecast business cycles and predict future levels of GDP.
A deficit in the capital account means that money is flowing out of the country, and this indicates that the nation is increasing its ownership of foreign assets and the opposite is true in the case of a surplus.
The capital account of a nation records all purchases and sales of assets such as money, stocks and bonds.
The reserve position in the International Monetary Fund refers to the reserves paid in by the nation upon joining the IMF, which the nation can borrow automatically in case of need.
Special Drawing Rights are international reserves created by the International Monetary Fund, that is allocated to member nations according to their importance in international trade.
Technology includes the tools such as machines and ways of thinking that is available to organizations for use in the promotion of progress and problem-solving.
In the context of business, innovation may be defined as the technical, industrial and commercial steps which lead to the marketing of newly manufactured products and the commercial use of new technical processes and equipment.
Technology transfer is the process by which commercial technology is disseminated. Its activities include the processing of invention disclosures, filing of patents, technology marketing and licensing.
The natural environment is the ultimate source of many inputs such as raw materials and energy which multinational companies use in their productive activities.oreign assets and the opposite is true in the case of a surplus.