Business 9

  1. importing
    buying products from another country
  2. exporting
    selling products to another country
  3. free trade
    the movement of goods and services among nations without political or economic barriers
  4. comparative advantage
    • theory that states that a country should sell to other countries those products that it produces most efficiently,
    • and buy from other countries those products that it cannot produce as effectivey or efficiently
  5. absolute advantage
    the advantage that exists when a country has a monopoly on producing a specific product or is able to produce it more efficiently than all other countries
  6. balance of trade
    the total value of a nation's exports compared to its imports measured over a particular period
  7. trade surplus
    a favorable balance of trade; occurs when the value of a country's exports exceeds that of its imports
  8. trade deficit
    an unfavorable balance of trade; occurs when the value of a country's imports exceeds that of its exports
  9. balance of payments
    the difference between money coming into a country (from exorts) and money leaving the country (for imports) plus money flows from ohter factors such as tourism, foreign aid, military expenditures, and foreign nvestment
  10. dumping
    selling products in a foreign country at lower prices than those charged in the producing country
  11. licensing
    a global strategy in which a firm (the licensor) allows a foreign company (the licensee) to produe its product in exchange for a fee (a royalty)
  12. contract manufacturing
    a foreign country's production of private-label goods to which a domestic company then attaches its brand name or trademark, part of the broad category of outsourcing
  13. joint venture
    a partership in which two or more companies (often from different comapnies) join to undertake a moajor project
  14. strategic alliance
    a long term partnernership between two or more companies established to help each company build competitive market advantages
  15. foreign direct investment (FDI)
    the buying of permanent property and businesses in foregin nations
  16. foreign subsidiary
    a company owned by another company in another country, called the parent company
  17. multinational corporation
    an organization that manufactures and markets products in many different countris and has multinational stock ownership and multinational management
  18. sovereign wealth funds(SWF)
    investment funds controlled by governents holding large stakes in foreign companies
  19. exchange rate
    the value of one nation's currency relative to currencies of other countries
  20. devaluation
    lowering the value of a nation's currency relative to other countries
  21. countertrading
    a complex form of bartering in which several countries may be invoved, each trading goods for goods or services for services
  22. trade protectionism
    the use of govt regulations to limit the import of goods and services
  23. tariff
    a tax imposed on imports
  24. import quota
    a limit on the number of products in certain categories that a nation can import
  25. embargo
    a complete ban on import or export of a certain product, or the stopping of all trade with a particular country
  26. General Agreement on Tariffs and Trde (GATT)
    a 1948 agreement that established an international forum for negotiating mutual reductios in trade restrictions
  27. World Trade Organization(WTO)
    The international organization that replaced General Agreement on Tariffs and Trade (GATT), and was assigned the duty to mediate trade disputes among nations
  28. common market
    a regional group of countries that have a common external tariff, no internal tariffs, and a coordination of laws to facilitate exchange; also called a trading bloc. i.e., the European Union
  29. North American Free Trade Agreement (NAFTA)
    Agreement that created a free-trade area among the United States, Canada, and Mexico
Card Set
Business 9
Doing Business In Global Market