Flashcards in Chapter 3: Competing in Global Markets Deck (28):
1
Exporting
Selling products to another country
2
Importing
Buying products from another company
3
Free trade
the movement of goods and services among nations without political or economic trade barriers
4
Comparative advantage theory
A country should sell to other countries those products that it produces most effectively and efficiently, and buy from others those that it can't produce as effectively or efficiently
5
Absolute advantage
A country has a monopoly on producing a specific product or is able to produce it more efficiently than all other countries.
6
Balance of trade
A nation's ration of exports to imports
7
Trade deficit
Whenthe value of a nation's imports exceeds that of its exports
8
Favorable balance of trade
The value of a nation's exports exceeds that of its imports
9
Balance of payments
the difference between money coming into a country and money leaving the country
10
Foreign direct investment
The buying of permanent property and businesses in foreign nations
11
Dumping
Selling products in a foreign country at lower prices than those charged in the producing company
12
Licensing
A firm gives the right to manufacture its product or use its trademark to a foreign company for a fee
13
Contract manufacturing
A foreign company's production of private-label goods to which a domestic company then attaches its own brand name or trademark
14
Joint venture
Partnership in which two or more companies join to undertake a major project
15
Strategic alliance
A long-term partnership between two or more companies established to help each company build competitive market advantages
16
Foreign subsidiary
A company that is owned in a foreign country by another company
17
Multinational corporation
an organization that manufactures and markets products in many different countries, with multinational stock ownership and management
18
Exchange rate
the value of one nation's currency against another
19
Devaluation
Lowering the value of a nation's currency relative to other currencies
20
Countertrading
A complex form of bartering in which several countries may be involved, each trading goods for goods or services for services.
21
Trade protectionism
the use of government regulations to limit the import of goods and services
22
Import quota
limits the number of products in certain categories that a nation can import
23
Tariff
A tax on imports
24
Embargo
a complete ban on the import or export of a certain product or the stopping of all trade with a particular country
25
GATT: General Agreement on Tariffs and Trade
Formed in 1948 and established an international forum for negotiating mutual reductions in trade restrictions
26
WTO: World Trade Organization
Established in 1995 and assumed the primary task of mediating future trade disputes
27
Common Market
regional group of countries that have a common external tariff, no internal tariffs, and the coordination of laws to facilitate exchange among member countries
28