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37 Cards in this Set
- Front
- Back
International Business |
the buying, selling, and trading of goods and services across national borders |
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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 |
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comparative advantage |
the basis of most international trade, when a country specializes in products that it can supply more efficiently or at a lower cost than it can produce other items |
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outsourcing |
the transferring of manufacturing or other tasks to countries where labor and supplies are less expensive |
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exporting |
the sale of goods and services to foreign markets |
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importing |
the purchase of goods and services from foreign markets |
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balance of trade |
the difference in value between a nation's exports and its imports |
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trade deficit |
a nation's negative balance of trade, which exists when that country imports more than it exports |
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balance of payments |
the difference between the flow of money into and out of a country |
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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 distribution systems |
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exchange rate |
the ratio at which one nation's currency can be exchanged for another nation's currency |
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import tariff |
a tax levied by a nation on goods imported into the country |
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exchange controls |
regulations that restrict the amount of currency that can be bought or sold |
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quota |
a restriction on the number of units of a particular product that can be imported into a country |
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embargo |
a prohibition on trade in a particular product |
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dumpling |
the act of a country or business selling products at less than what it costs to produce them |
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cartel |
a group of firms or nations that agrees to act as a monopoly and not compete with eachother, in order to generate a competitive advantage in world markets |
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General Agreement on Tariffs and Trade (GATT) |
a trade agreement, originally 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 |
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World Trade Organization (WTO) |
international organization dealing with the rules of trade between nations |
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North American Free Trade Agreement (NAFTA) |
agreement that eliminates most tariffs and trade restrictions on agricultural and manufactured products to encourage trade among Canada, the US, and Mexico |
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European Union (EU) |
a union of European nations established in 1958 to promote trade among its members; one of the largest single markets today |
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Asia-Pacific Economic Cooperation (APEC) |
an international trade alliance that promotes open trade and economic and technical cooperation among member nations |
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Association of Southeast Asian Nations |
a trade alliance that promotes trade and economic integration among member nations in Southeast Asia |
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World Bank |
an organization established by the industrialized nations in 1946 to loan money to underdeveloped and developing countries; formally known as the International Bank for Reconstruction and Development. |
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International Monetary Fund (IMF) |
organization established in 1947 to promote trade among member nations by eliminating trade barriers and fostering financial cooperation |
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countertrade agreements |
foreign trade agreements that involve bartering products for other products instead of for currency |
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trading company |
a firm that buys goods in one country and sells them to buyers in another country |
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licensing |
a trade agreement in which one company -the licensor -allows the other company to use its company name, products, patents, brands, trademarks, raw materials, and/or production processes in exchange for a fee or royalty |
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franchising |
a form of licensing in which a company -the franchiser -agrees to provide a franchisee a name, logo, methods of operation, ads, products, and other elements associated with a franchiser's business in return for a financial commitment and the agreement to conduct business in accordance with the franchiser's standard of operations |
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contract manufacturing |
the hiring of a foreign company to produce a specified volume of the initiating company's product to specification; the final product carries the domestic firm's name |
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offshoring |
the relocation of business processes by a company or subsidary to another country; different than outsourcing because the company retains control of the offshored processes. |
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joint venture |
the sharing of the costs and operation of a business between a foreign company and a local partner |
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stategic alliance |
a partnership formed to create competitive advantage on a worldwide basis |
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direct investment |
the ownership of overseas facilities |
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multinational corporation (MNC) |
a corporation that operates on a worldwide scale, without significant ties to any one nation or region |
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multinational strategy |
a plan, used by international companies, that involves customizing products, promos, and distribution according to cultural, technological, regional, and national differences |
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(globalization) global strategy |
a stategy that involves standardizing products for the whole world as if it were a single entity |