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The term international business denotes all international dealings of a country that pertain to the exchange of goods, services and information for commercial purposes, and money. Figure 2.1 graphically depicts the field and its main activities. All international business activities are interrelated and interdependent.
Figure 2.1 International Business Activities
If industry produces more than people can consume, then the country will export (X) the difference:
SS > DD → X
If people consume more than industry can produce, then the country will import (M) the difference:
DD > SS → M
DD = Aggregate Demand SS = Aggregate Supply
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