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Introduction Whether you are a businessmen or not, you have some business dealing every day. Maybe you don’t believe this, but it’s true. We are all part of this business world and involved in the business activities in some way. Text 1 Economic activity began with the caveman, who was economically self-sufficient. He did his own hunting, found his own shelter, and provided for his own needs. As primitive populations grew and developed, the principle of division of labor evolved. On person was more able to perform certain activities than another, and therefore each person concentrated on what he did best. While one hunted, another fished. The hunter then traded his surplus to the fisherman, and thus each benefited from the variety of diet. Text 3 If nations traded item for item, such as one automobile for10,000 bags of coffee, foreign trade would be extremely cumbersome and restrictive. So instead of barter, which is the trade of goods without an exchange of money, the United states receives money in payment for what it sells. It pays for Brazilian coffee with dollars, which Brazil can then use to buy wool from Australia, which in turn can buy textiles from Great Britain, which can then buy tobacco from the United States. 8 For most nations, exports and imports are the most important international activity. When nations export more than they import, they are said to have a favorable balance of trade. When they import more than they export, an unfavorable balance of trade exists. Nations try to maintain a favorable balance of trade, which assures them of the means to buy necessary imports. Some nations, such as Great Britain in the nineteenth century, based their entire economies on the concept of importing raw materials, processing them into manufactured goods, and then exporting the finished goods. The subsequent profits enabled these nations to import the food they needed. 9 In addition to
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