Intro to Business Ch. 3 Terms

  1. Absolute Advantage
    A country has a monopoly on producing a specific product or is able to produce it more efficiently than all other countries.
  2. Balance of payments
    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.
  3. Balance to trade
    a nation’s ratio of exports to imports.
  4. Comparative advantage theory
    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.
  5. Counter-trading
    a complex form of bartering in which several nations may be involved, each trading goods for goods or services for services.
  6. Dumping
    selling products in a foreign country at lower prices than those charged in the producing country.
  7. Embargo
    a complete ban on the import or export of a certain product or stopping all trade with a particular country.
  8. Foreign direct investment
    buying of permanent property and businesses in foreign nations.
  9. Licensing
    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.)
  10. Multinational Corporation
  11. NAFTA
    NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA) is the agreement that created a free-trade area among the United States, Canada, and Mexico
  12. Tariff
    a tax on imports, making imported goods more expensive.
  13. Trade deficit
    UNFAVORABLE BALANCE OF TRADE; occurs when the value of a country’s imports exceeds that of its exports.
Card Set
Intro to Business Ch. 3 Terms
Ch. 3 Intro to Business terms