As International Business will affect each and every nation in
transacting legal business transactions, economic theories as well are reckoned
to be discussed for the reason that International Business will affect the
whole world economy. As my professional
opinion, world economy is the result of the global movement of International
Business. Certainly, Macro economic
theories will prove the natural existence of economic theories in the
International Business and communications.
THEORIES:
Mercantilism- is an economic philosophy that believes in the nation’s
wealth from the accumulated tangible wealth and treasury goods. Examples for these are the gold bullions and
the national treasury of the given country. As a result, the wealth of the
country will encourage export and discourage imports.
Absolute Advantage- the idea of Adam Smith that a country can benefit
from specializing one product to pay the imported goods will result to the
country’s efficiency in specializing a product to a more world class standard.
Comparative Advantage- implies to the absolute disadvantage of one
country in producing two commodities but relatively advantage in producing of
one good that is lesser in disadvantages.
Heckscher-Ohlin Theory- applies the concept that a country can abundantly
supply the goods that they are rich in terms of the natural resources and man
power supply.
As a whole, the continued research for many academic economist around
the globe paves the new ventures in International Business and World Economy.
Comments