Geb2011:Ch.3

Question Answer
Importing Buying products from another country
Exporting Selling products to another country
Free Trade Movement of goods and services among nations without political or economic barriers
Comparative advantage theory We should sell to other countries we produce the most effectively and buy from other countries the products that we produce the least efficiently
Absolute advantage When a country produces a product more efficiently than all other countries
Balance ofTrade Total value of a nation’s exports compared to its imports measure over a particular period
Trade surplus A favorable balance of trade ; when a country's exports exceeds its imports
Trade deficit An unfavorable balance of trade ; When a country's exports is less than its imports
Balance of Payments The difference between money coming into a country and money leaving the country plus money flows from other factors
Dumping Selling products in another country for cheaper than they are sold for in another country
Licensing The right to manufacture a product or use its trademark to a forgein company for a fee (royalty)
Exporting Sending goods or services to another country for sale
Franchising An agreement whereby someone with a goodies for a business sells others the rights to use the business name and sell a product or service in a given territory
Contract Manufacturing A foreign company produces privates-labeled goods to which a domestic company then attaches its own brand names or trademark
Joint Venture A partnership in which two or more companies from other countries join to undertake a major project
Strategic Alliance A long term partnership between two or more companies established to help each company build competitive market advantages
Foreign direct investment The buying of permanent property and businesses in a foreign nation
Foreign Subsidiary A company owned in a foreign country by another company called the parent company
Multinational corporation An organization that manufactures and markets products in many different countries and has multinational stock ownership and multinational management
Exchange Rate The value of one nation's currency relative to the currencies of other countries
Currency Devaluation Reduction value of a nations currency relative to the currencies of other countries
Countertrading A form of bartering in which several countries may be involved, each trading goods for goods or services for services
Trade protectionism The use of government regulations to limit the import of goods and services
Tariff A tax imposed on imports
Import Quota A limit on the number of products in certain categories that a nation can import
Embargo A complete ban on the import or export of a certain product or the stopping of all trade with a particular country
Common Markets (TradingBloc) A regional group of countries with a common external tariff, no internal tariffs and coordinated laws to facilitate exchange among members
European Union (EU) An economic and political union of 28 member states that are located primarily in Europe
North American free trade agreement (NAFTA) Created a free trade area among US, Canada and Mexico and other western european and countries to provide collective security against the soviet union
Protective Tariff Retail prices of imported products is increased for the purpose of making domestic goods more competitively priced
Revenue Tariff To raise money for the government
Global Strategy Process of expanding and competing in globalized markets
Ethics The standard of moral behavior
Whistleblower Insiders who report illegal or unethical behavior
Corporate Social Responsibility Concerns businesses have for the welfare of society
Stakeholders customers, employees, stockholders, suppliers, dealers, bankers, the media, people in the local community, environmentalists, and elected government leaders.
Insider Trading Using private company information to further your own fortune
Consumer Rights Social activism dedicated to protecting the rights of consumers in their dealing with business
Unfair Pricing two or more firms collaborate on price fixing
Corporate citizenship Adopting a strategic approach to fulfilling economic, ethical, environmental and social responsibility
Economic Model of Social Responsibility Society will benefit more when Business is left alone to produce and market profitable products society needs
Socioeconomic Model of Social Responsibility Business should emphasize not only profits but also the impact of its decisions on society
Non tariff barrier Non tax measure imposed by a government to favor domestic over foreign suppliers
Foreign-exchange control Restriction on the amount of a particular foreign currency that can be purchased or sold
World Trade Organization Replaced GATT; Incorporates trade in goods, services, and ideas
General Agreement on Tariffs and Trade International organization of 160 countries dedicated to reducing or eliminating tariffs and other barriers to world trade

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