Chapter 3 Flashcards
(21 cards)
Trade surplus
Overage that occurs when the total value of a nation’s exports is higher than the total value of its imports.
Trade deficit
Shortfall that occurs when the total value of a nation’s imports is higher than the the total value of its exports.
Exchange rates
A measurement of value of one nation’s currency relative to the currency of other nations.
Countertrade
International trade that involves the barter of products for products rather than currency.
Foreign outsourcing
(Also contract manufacturing) Contracting with foreign suppliers to produce products, usually at a fraction of the cost of domestic production.
Importing
Buying products domestically that have been produced or grown in foreign nations.
Exporting
Selling products in foreign nations that have been produced or grown domestically.
Foreign licensing
Authority granted by a domestic firm to a foreign firm for the rights to produce and market its product or to use its trademark/patent rights in a defined geographical area.
Foreign franchising
A specialized type of foreign licensing in which a firm expands by offering businesses in other countries the right to produce and market its products according to specific operating requirements.
Direct investment
(Or foreign direct investment) When firms either acquire foreign firms or develop new facilities from the ground up in foreign countries.
Joint ventures
When two or more companies join forces - sharing resources, risks, and profits, but not actually merging companies - to pursue specific opportunities.
Partnership
A voluntary agreement under which two or more people act as co-owners of a business for profit.
Strategic alliance
An agreement between two or more firms to jointly pursue a specific opportunity without actually merging their businesses. Strategic alliances typically involve less formal, less encompassing agreements than partnership.
Sociocultural differences
Differences among cultures in language, attitudes, and values.
Infrastructure
A country’s physical facilities that support economic activity.
Protectionism
National policies designed to restrict international trade, usually with the goal of protecting domestic businesses.
Tariffs
Taxes levied against imports
Quotas
Limitations on the amount of specific products that may be imported from certain countries during s given time period.
Embargo
A complete ban on international trade of a certain item, or a total halt in trade with a particular nation.
Free trade
The unrestricted movement of goods and services across international borders.
Balance of trade
A basic measure of the difference in value between a nation’s exports and imports, including both goods and services.
