Chapter 3 Flashcards
(29 cards)
import duty (tariff)
a tax levied on a particular foreign product entering a country
strategic alliance
a partnership formed to create competitive advantage of worldwide basis
countertrade
an international barter transaction
absolute advantage
the ability to produce a specific product more efficiently than any other nation
(ability of entity produce grater quantity of a product or service)
trade deficit
a negative balance of trade
trading company
provides an link between buyers and sellers in different countries
international business
all business activities that involve exchange across national boundaries
comparative advantage
the ability to produce a specific product more efficiently than any other product
(sold for lower cost)
exporting
selling and shipping raw material or products to other nations
importing
purchasing raw materials in other countries and bringing them into one;s own country
balance of trade
the total value of a nation’s exports minus the total value of its imports over some period of time
balance of payments
the total flow of money into a country minus the total flow of money out of that country over some period of time
dumping
exportation of large quantities of a large product at a price lower than that of the same product in the home market
nontariff barrier
a nontax measure imposed by a government to favor domestic over foreign suppliers
import quota
a limit on the amount of a particular good that may be imported into a country in a given period of time
embargo
a complete halt to trading with a particular nation or in a particular product
foreign-exchange control
a restriction on the amount of particular foreign currency that can be purchased or sold
currency devaluation
the reduction of the value of a nation’s currency relative to the currencies of other countries
General Agreement of Tariffs and Trade (GATT)
an international organization of 153 nation dedicated to reducing or eliminating tariffs and other barriers to world trade
World Trade Organization (WTO)
powerful successor to GATT that incorporates trade in goods, services, and ideas
letter of credit
issued by a bank on request of an importer stating that the bank will pay an amount of money to a stated benefinciary
multinational enterprise
a firm that operates on a worldwide scale without ties to any specific nation or region
Export-Import Bank of the United States
an independent agency of the U.S. government whose function is to assist in financing the export of American firms
Multilateral Development Bank (MDB)
an internationally supported bank that provides loans to developing countries to help them grow
