4. How Do You Gauge
the Size and Market
Potential Economy?
The most common way is to look at the Gross
Domestic Product (GDP). The GDP is the standard
measure of value of goods and services in a country
during a certain period.
5. What is a Trade
Deficit?
A trade deficit is when a country is importing more
than exporting. A country that suffers from a trade
deficit is the United States.
6. What is a Trade
Surplus?
A trade surplus is the opposite of a trade deficit. It is
when a country exports more than it imports. China is
an example of a country that has a trade surplus.
7. Can Exports be
Taxed?
Yes, many countries put tariffs on exported items. A
tariff, or duty, is a tax levied on an imported item.
Tariffs are intended to make products more expensive
and less competitive with domestic products.
8. How do countries
know how much to
export?
Most countries that export follow a quota, which is a
specific amount of product that can be brought into a
country at a time. Quotas help with organizational
issues when exporting.
9. Is currency the
same all countries?
No. The exchange rate is used to help figure out the
conversion between currencies. Countries have
central banks that figure out the conversion. In the
United States that is the Federal Reserve.
10. What are Trade
Agreements?
Every marketer must understand trade agreements,
which are, a wide-ranging taxes, tariff and trade treaty that
often includes investment guarantees. It exists when two
or more countries agree on terms that help them trade with
each other. Countries can form a trade bloc which consists
of countries that have signed trade agreements.
