Bus 101 - Chapter 3

Front 1

International Business

Back 1

the buying, selling, and trading of goods and services across national borders

Front 2

absolute advantage

Back 2

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

Front 3

comparative advantage

Back 3

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

Front 4

outsourcing

Back 4

the transferring of manufacturing or other tasks to countries where labor and supplies are less expensive

Front 5

exporting

Back 5

the sale of goods and services to foreign markets

Front 6

importing

Back 6

the purchase of goods and services from foreign markets

Front 7

balance of trade

Back 7

the difference in value between a nation's exports and its imports

Front 8

trade deficit

Back 8

a nation's negative balance of trade, which exists when that country imports more than it exports

Front 9

balance of payments

Back 9

the difference between the flow of money into and out of a country

Front 10

infrastructure

Back 10

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

Front 11

exchange rate

Back 11

the ratio at which one nation's currency can be exchanged for another nation's currency

Front 12

import tariff

Back 12

a tax levied by a nation on goods imported into the country

Front 13

exchange controls

Back 13

regulations that restrict the amount of currency that can be bought or sold

Front 14

quota

Back 14

a restriction on the number of units of a particular product that can be imported into a country

Front 15

embargo

Back 15

a prohibition on trade in a particular product

Front 16

dumpling

Back 16

the act of a country or business selling products at less than what it costs to produce them

Front 17

cartel

Back 17

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

Front 18

General Agreement on Tariffs and Trade (GATT)

Back 18

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

Front 19

World Trade Organization (WTO)

Back 19

international organization dealing with the rules of trade between nations

Front 20

North American Free Trade Agreement (NAFTA)

Back 20

agreement that eliminates most tariffs and trade restrictions on agricultural and manufactured products to encourage trade among Canada, the US, and Mexico

Front 21

European Union (EU)

Back 21

a union of European nations established in 1958 to promote trade among its members; one of the largest single markets today

Front 22

Asia-Pacific Economic Cooperation (APEC)

Back 22

an international trade alliance that promotes open trade and economic and technical cooperation among member nations

Front 23

Association of Southeast Asian Nations

Back 23

a trade alliance that promotes trade and economic integration among member nations in Southeast Asia

Front 24

World Bank

Back 24

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.

Front 25

International Monetary Fund (IMF)

Back 25

organization established in 1947 to promote trade among member nations by eliminating trade barriers and fostering financial cooperation

Front 26

countertrade agreements

Back 26

foreign trade agreements that involve bartering products for other products instead of for currency

Front 27

trading company

Back 27

a firm that buys goods in one country and sells them to buyers in another country

Front 28

licensing

Back 28

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

Front 29

franchising

Back 29

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

Front 30

contract manufacturing

Back 30

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

Front 31

offshoring

Back 31

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.

Front 32

joint venture

Back 32

the sharing of the costs and operation of a business between a foreign company and a local partner

Front 33

stategic alliance

Back 33

a partnership formed to create competitive advantage on a worldwide basis

Front 34

direct investment

Back 34

the ownership of overseas facilities

Front 35

multinational corporation (MNC)

Back 35

a corporation that operates on a worldwide scale, without significant ties to any one nation or region

Front 36

multinational strategy

Back 36

a plan, used by international companies, that involves customizing products, promos, and distribution according to cultural, technological, regional, and national differences

Front 37

(globalization) global strategy

Back 37

a stategy that involves standardizing products for the whole world as if it were a single entity