Intro to Business Ch. 3 Terms

A country has a monopoly on producing a specific product or is able to produce it more efficiently than all other countries.

the difference between money coming into a country (from exports) and money leaving the country (for imports) plus money flows from other factors such as tourism, foreign aid, military expenditures, and foreign investment.

a nation’s ratio of exports to imports.

a country should sell to other countries those products that it produces most effectively and efficiently and should buy from other countries those products that it cannot produce as effectively or efficiently.

a complex form of bartering in which several nations may be involved, each trading goods for goods or services for services.

selling products in a foreign country at lower prices than those charged in the producing country.

a complete ban on the import or export of a certain product or stopping all trade with a particular country.

buying of permanent property and businesses in foreign nations.

a global strategy in which a firm (the LICENSOR) allows a foreign company (the LICENSEE) to produce its products in exchange for a fee (a ROYALTY.)

NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA) is the agreement that created a free-trade area among the United States, Canada, and Mexico

a tax on imports, making imported goods more expensive.

UNFAVORABLE BALANCE OF TRADE; occurs when the value of a country’s imports exceeds that of its exports.