Global Business, Term 4.

Question 1

Imports

Answer 1

An import is a good or service bought in one country that was produced in another. A component in international trade.

Question 2

Exports

Answer 2

Exports refers to a product or service produced in one country but sold to a buyer abroad. Exports are one of the oldest forms of economic transfer and occur on a large scale between nations.

Question 3

Tariffs

Answer 3

A tariff is a tax imposed by one country on the goods and services imported from another country.

Question 4

Subsidies

Answer 4

A subsidy is any financial aid ($$$) provided by a government to a producer or seller of a good or service that is designed to increase the competitiveness of a particular industry firm or entire industry.

Question 5

Free Trade

Answer 5

Under a free trade policy, goods and services can be bought and sold across international borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange.

Question 6

Transnational Corporations

Answer 6

Very large companies that operate in more than one country also called multinational corporations.

Question 7

Outsourcing

Answer 7

Contracting work out to an external organisation.

Question 8

Offshoring

Answer 8

Getting work done in a different country.

Question 9

Surplus

Answer 9

Where a country’s exports exceed it imports or, where a country’s income exceeds its expenses.

Question 10

Deficit

Answer 10

Where a country’s imports exceed its exports, or, where a country’s expenses exceed its income.

Question 11

Specialisation

Answer 11

The process of an organisation / country concentrating its labour and resources on a certain type of production to be more efficient and create a comparative advantage for an economy.

Question 12

Economic Growth

Answer 12

An increase in the size of a country’s economy over a period of time. The size of economy is measured by total production of goods and services in the economy called gross domestic product (GDP).

Question 13

Comparative Advantage

Answer 13

Gives companies the abilities to sell goods and services at lower prices than their competitors, gaining stronger sales margins and greater profitability.

Question 14

Anti-Dumping

Answer 14

An anti-dumping duty is a protectionist tariff that a domestic government imposes on foreign imports that it believes priced below fair market value.

Question 15

Embargo

Answer 15

International trade restrictions adopted in response to objectionable policies.

Question 16

Quotas

Answer 16

Government-imposed trade restriction that limits the number or monetary value of goods that a country can import or export during a particular period. Countries use quotas in international trade to help regulate the volume of trade between them and other countries.

Question 17

Physical barriers to trade

Answer 17

Natural barriers can slow down trade between nations by making it harder and more expensive to move goods from place to place. Example: The Sahara Desert makes it extremely hard for countries in northern Africa to trade with the rest of the continent.

Question 18

Free Trade Agreement

Answer 18

Treaties between two or more countries designed to reduce or eliminate certain barriers to trade and investment, and to facilitate stronger trade and commercial ties between participating countries.

Question 19

Bilateral

Answer 19

An agreement or relationship between two countries.

Question 20

Multilateral

Answer 20

An agreement or relationship between more than two countries.

Question 21

World Trade Organisation

Answer 21

An organisation for liberalising trade, which operates a system of trade rules and provides a forum for trade negotiations between governments for settling trade disputes.

Question 22

Interdependence

Answer 22

Shared needs of countries for the resources, goods, services, labour, and knowledge supplied by other countries.

Question 23

Geographic Immobility

Answer 23

Barriers to the mobility of factors of production from one region to another.

Question 24

Occupational Immobility

Answer 24

Barriers to the mobility of factors of production between different industries leading to these factors being unemployed or under-utilised.

Question 25

Globalisation

Answer 25

The growing interdependence of the world’s economies, cultures, and populations, brought about by cross-border trade in goods and services, technology, and flows of investment, people, and information.

Question 26

Protectionism

Answer 26

The theory or practice of shielding a country’s domestic industries from foreign competition by taxing imports.

Question 27

Foreign Direct Investment

Answer 27

Foreign direct investment (FDI) is a category of cross-border investment in which an investor resident in one economy establishes a lasting interest in and a significant degree of influence over an enterprise resident in another economy.

Question 28

Absolute advantage

Answer 28

The ability of a country to produce a good or service at a lower cost than another country.