Chapter 3 Flashcards
(38 cards)
International Business
the buying, selling, and trading of goods, services, and services across national boundaries.
Absolute Advantage
a monopoly that exists when a country is the only source of an item, the only producer of an item, or the most efficient producer of an item.
Comparative Advantage
the basis of most international trade, when a company specializes in products that t can supply more efficiently or at a lower cost than it can produce other items.
Outsourcing
the transferring of manufacturing of other tasks, such as data processing, to countries where labor and supplies are less expensive.
Exporting
the sale of goods and services to foreign markets.
Importing
the purchase of goods and services from a foreign market
Balance of Trade
the difference in value between a nation’s exports and imports.
Trade Deficit
a nation’s balance of trade, which exists when that country imports more products than it exports
Balance of Payments
the difference between the flow of money into and out of a country.
Infrastructure
the physical facilities that support a country’s economic activities, such as, railroads, highways, ports, airfields, utilities and power plants, schools, hospitals, communication systems, and commercial distributions systems.
Exchange Rate
the ratio at which one nation’s currency can be exchanged for another nation’s currency
Import Tariff
a tax levied by a nation on goods imported into the country
Exchange Controls
regulations that restrict the amount of currency that can be bought or sold
Quota
a restriction on the number of units of a particular product that can be imported into a country.
Embargo
a prohibition on a trade in a particular product
Dumping
the act of a country or business selling products at less than what it costs to produce them
Cartel
a group of firms or nations that agrees to act as a monopoly and not compete with each other, in order to generate a competitive advantage in world markets
General Agreement on Tariff and Trade (GATT)
a trade agreement signed by 23 nations in 1947, that provided a forum for tariff negotiations and a place where international trade problems could be discussed and resolved
World Trade Organization (WTO)
international organization dealing with the rules of trade between nations
United States-Mexico-Canada Agreement (USMCA)
agreement that eliminated most tariffs and trade restrictions to encourage trade among the US, Mexico, and Canada
European Union (EU)
a union of European nations established in 1958 to promote trade among its members; one of the largest single markets today
Asia-Pacific Economic Cooperation (APEC)
an international trade alliance that promotes pen trade and economic and technical cooperation among member nations
Association of Southeast Asian Nations (ASEAN)
a trade alliance that promotes trade and economic integration among member nations of Southeast Asia
World Bank
an organization established by the industrialized nations in 1949 to loan money to underdeveloped and developing countries formally known as the International Bank for Reconstruction and Development.
