session 3 Flashcards
(26 cards)
What is globalization in the context of business?
Business has crossed most political, geographical, and social lines, becoming a truly global endeavor.
What has led to the shift from domestic to global business exchanges?
Technology and global economic priorities.
What is the role of import and export channels in globalization?
They facilitate the movement of products and services to reach customers globally.
What are two key trade multilateral agreements in the U.S.?
- WTO (World Trade Organization)
- NAFTA (North American Free Trade Agreement)
What is the purpose of the WTO?
To mediate disputes among its worldwide member countries.
Define importing in the context of international trade.
Accepting and buying products produced from another country.
Define exporting in the context of international trade.
The ability to send and sell product to another country.
What is free trade?
The movement of goods and services among nations without political or economic trade barriers.
What is balance of trade?
Ratio of imports and exports, aiming for a healthy balance and a trade surplus.
What is foreign direct investment?
The buying of permanent property and businesses in foreign nations.
What was NAFTA?
A series of agreements for a free-trade alliance among North American countries, enforced since January 1994.
What are the three kinds of advantages in production and distribution?
- Absolute Advantage
- Comparative Advantage
- National Competitive Advantage
Define absolute advantage.
The ability to uniquely produce a good or service unlike any other producer.
Define comparative advantage.
The ability to produce a good or service more efficiently or at a better price compared to other producers.
Define national competitive advantage.
A combination of advantageous factors delivered by government, business, and cultural priorities.
What are tariffs?
Extra taxes levied on some imported goods.
What are embargos?
Total bans on imports and exports.
How do businesses reach global customers?
By developing partnerships and taking advantage of trade agreements.
What is licensing in business?
Issuing rights to produce a product in exchange for a fee.
What is franchising?
Privilege given to a person or business to sell the franchisor’s product for a fee.
What are strategic alliances?
Partnerships between companies with similar goals.
What is joint venturing?
A financial partnership between two or more companies to undertake a project.
What is the difference between an international company and a multinational company?
An international company operates in some aspects globally while maintaining core operations domestically, whereas a multinational company duplicates all aspects of operations across countries.
What factors affect global trade?
Cultural differences and societal expectations.
