Chapter 3 Competing in the Global Marketplace Flashcards
Key terms used in Chapter 3 of Openstax Introduction to Business (41 cards)
A(n) ___________ is the ability to recognize and react to international business opportunities, be aware of threats from foreign competition, and effectively use international distribution networks to obtain raw materials and move finished products to customers.
global vision
_______ are goods and services produced in one country and sold to other countries.
exports
_________ are goods and services that are bought from other countries.
imports
The difference between the value of a country’s exports and the value of its imports during a specific time is the _______________.
balance of trade
A(n) ___________ is a favorable balance of trade that occurs when a country exports more than it imports.
trade surplus
An unfavorable balance of trade that occurs when a country imports more than it exports is a(n) ______________.
trade deficit
A summary of a country’s international financial transactions showing the difference between the country’s total payments to and its total receipts from other countries is the ____________.
balance of payments
A system in which prices of currencies move up and down based upon the demand for and supply of the various currencies are called _________.
floating exchange rates
A(n) ___________ is a lowering of the value of a nation’s currency relative to other currencies.
devaluation
A(n) ______________ is a situation when a country can produce and sell a product at a lower cost than any other country or when it is the only country that can provide the product.
absolute advantage
The _________________ is the concept that each country should specialize in the products that it can produce most readily and cheaply and trade those products for those that other countries can produce more readily and cheaply.
principle of comparative advantage
The policy of permitting the people and businesses of a country to buy and sell where they please without restrictions is called ____________.
free trade
___________ is the policy of protecting home industries from outside competition by establishing artificial barriers such as tariffs and quotas.
protectionism
Sending work functions to another country, resulting in domestic workers losing their jobs is called _________________-.
outsourcing
________ refers to the informal group that brings together 19 countries and the European Union—the 20 leading economies in the world.
G20
What is a tax imposed on imported goods?
tariff
Tariffs that are imposed in order to make imports less attractive to buyers than domestic products are called __________-.
protective tariffs
A limit on the quantity of a certain good that can be imported is called a(n) _____________.
import quota
A(n) ______ is a total ban on imports or exports of a product.
embargo
Government rules that give special privileges to domestic manufacturers and retailers are called ________________.
buy-national regulations
Laws that require a company earning foreign exchange (foreign currency) from its exports to sell the foreign exchange to a control agency, such as a central bank, are called _________.
exchange controls
This practice of charging a lower price for a product in foreign markets than in the firm’s home market is called what?
dumping
The 1994 agreement, ________________, was originally signed by 117 nations to lower trade barriers worldwide.
Uruguay Round
The __________________ is an organization established by the Uruguay Round in 1994 to oversee international trade, reduce trade barriers, and resolve disputes among member nations.
World Trade Organization (WTO)
