Mid Term

Mid Term

1. Differentiate between an economic expansion and an economic contraction. What is the difference between a recession and a recovery?

There are contributing factor to economic stability due to the fact that a nation’s economy never stays exactly the same. I will differentiate the between an economic expansion and an economic contraction. As well and explain the difference between a recession and a recovery.

Economic expansion occurs when consumers are spending more on good and services, as in making unnecessary purchases. This in turns prompts businesses to produce more goods and services. Economic contraction is consumer spending declines, as in only purchasing their daily necessities. Business has to cut back on production, as well as employees. If the Economic contractions is severe enough a nation could enter into a recession. A recession when there is two consecutive quarters of decline in domestic product. When a recession is turning around, the nation moves toward recovery. Companies start producing more, with more produce; they need to employee more people. In turn more people employed creates more spending to create economic expansion.

Economic contraction is the result of a recession, spending slows down as well as production. Recovery would happen in economic expansion, companies are producing more creating jobs, in turn creates spending.

2. Identify and describe the five common forms of international business.
Five common forms of international business are, Importing and Exporting, Licensing, franchising, strategic alliance, joint venture and foreign direct investment.
Importing is buying goods or services from a supplier from country and selling them in your country. Exporting is selling good to companies, or persons in another country. Exporting has less risk the importing.
Licensing is a popular approach to international business. A license agreement entitles you to use some or all of the other firm’s...

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