Chapter 3-1 Flashcards
International Business
- also referred as ________.
Business activities needed for creating, shipping, and selling goods and services across national borders
* foreign world trade
Domestic Business
Making, buying, and selling of goods and services within a country
Absolute Advantage
A county can produce a good or service at a lower cost than other countries
Comparative Advantage
* refers to \_\_\_\_\_
A country specializes in the production of a good or service
* opportunity cost
Imports
* examples?
Items bought from another country
* coffee, spices, crude oils
Exports
* examples?
Goods and services sold to other countries
* food, medicine, US movies
Balance of Trade
The difference between a country’s total exports and imports
Trade Surplus
Country sells more than it buys
Trade Deficit
Country buys more than it sells
Balance of Payments
The difference between the amount of money that comes in a country and the amount that goes out of it
Positive/Favorable Balance
A nation receives more money in a year than it pays out
Negative/Unfavorable Balance
A country sends out more than it takes in
Foreign Trade Market
The process of exchanging one currency for another
Exchange Rate
The value of currency in one country compared with the value in another
Currency leaves our country by …..
* 4 things *
- Money paid for importa
- Foreign aid to other countries
- Tourism
- Business and consumer investments into foreign countries
