Chapter 16 Flashcards
(19 cards)
Domestic business
Making, buying, selling goods and services within one’s own country.
International business
Includes all business activities needed to create, ship,
and sell goods and services across national borders.
Nations
Trade with one another to acquire goods they do not have, and to sell goods they can easily produce.
Importing
The buying of products or raw materials from other nations.
Exporting
The selling and shipping of finished products or raw materials to other nations.
Absolute advantage
A country is said to have an absolute advantage when it is only country that can provide a good or service, or can produce a good or service at a lower cost than other countries.
Infrastructure
Systems that makes an organization or a nation run (such as transportation, communication, water, electrical systems).
Balance of trade
The comparison between the total value of imports and the total value of exports.
Trade surplus
Total $Exports > Total $Imports
Trade deficit
Total $Exports < Total $Imports
Balance of payments
the total flow of money going into the country
receipts) minus the total flow of money leaving the country (payments
Positive balance of payment
Total flow of money going into the country
> Total flow of money leaving the country
Negative balance of payment balance
Total flow of money going into
the country < Total flow of money leaving the country
What improves political relations
Beyond economic benefits, international business or trade between nations also improves political relations
Protectionism
When countries protect their domestic manufacturing by
keeping out or limiting foreign-made goods through the use of: tariff barriers making imported foreign goods more expensive than
domestic products due to import duties or tariffs (taxes imposed on goods of international trade).
Non-tariff barriers
Non-tariff barriers such as import quotas (limit on the number of products that can come into the country), and trade embargos (ending trade with another nation).
N.A.F.T.A.
North American Free Trade Agreement between Canada, U.S.A. and Mexico.
Common markets
Agreements among member countries that eliminate
trade barriers or restrictions that reduce free trade, and allow workers to move freely across borders. (Eg. EU)
International trade organizations
That deal with the rules of trade between nations. (Ex. WTO (World Trade Organization), the International Monetary Fund (IMF), and the World Bank.
