Chapter 11: Differences in Economic Systems Around the Globe and Their Impacts on International Trade
Chapter 11 Introduction
Learning Objectives
After reading this chapter, you should be able to
- Identify national differences in economic systems of different countries.
- Identify risks associated with different economic systems.
- Explain strategies used to mitigate economic risks.
Think About It!
Video: Introduction to Economics
In this video from Crash Course, Jacob Clifford, and Adriene Hill talk about economic systems and macroeconomics.
Source: CrashCourse. (2015, July 30). Economic systems and macroeconomics: Crash Course economics #3 [Video]. YouTube. https://www.youtube.com/watch?v=B43YEW2FvDs
Reflection Questions
Before we begin, we encourage you to reflect on the following questions:
- What role does the government play in a free market economy?
- What does economist Thomas Sowell mean by phrase “There are no solutions, only trade-offs”?
Introduction
When engaging in trade with a foreign country, organizations face high levels of uncertainty due to the country’s fluctuating economic and financial conditions. Uncertainties are also caused by changes to tax laws and regulations by the country’s government. A thorough analysis and understanding of economic factors and implementing risk mitigation measures will allow organizations to reduce the impact of those changes and protect their assets.
