Bus 170 Chapter 3

Front 1

Refers to the buying, selling, and trading of goods and services across national boundaries.

Back 1

International business

Front 2

A monomoply 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.

Back 2

Absolute advantage

Front 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

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Comparative advantage

Front 4

The transferring of manufacturing or other tasks--such as data processing-- to countries where labor and supplies are less expensive

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Outsourcing

Front 5

The sale of goods and services to foreign markets

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Exporting

Front 6

The purchase of goods and services from foreign sources

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Importing

Front 7

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

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Balance of trade

Front 8

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

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Trade deficit

Front 9

A nation's positive balance of trade, which exists when the country exports more than it imports

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Trade surplus

Front 10

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

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Balance of payments

Front 11

Barrier to international trade; economic development and exchange rates

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Economic barriers

Front 12

The physical facilities that support a country's economic activities, such as railroads, highways, ports, airfields, utilities and power plants, schools, hospitals, communcation systems, and commercial distribution systems.

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Infrastructure

Front 13

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

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Exchange rate

Front 14

Barrier to international trade; laws and regulations, tariffs and trade restrictions, and political barriers

Back 14

Legal and political barriers

Front 15

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

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Import tariff

Front 16

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

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Exchange controls

Front 17

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

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Quota

Front 18

A prohibition on trade in a particular product

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Embargo

Front 19

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

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Dumpings

Front 20

A group of firms or nations that agrees to act as a monopoly and not compete with each other in order to generate a competitive advantage in the world market

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Cartel

Front 21

Economic barriers, legal and political barriers, social and cultural barriers, and technological barriers

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Barriers to international trade

Front 22

Orignally signed by 23 nations in 1947, provided for a forum for tariff negotiations and a place where international trade problems cound be discussed and resloved

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General Agreement on Tariffs and Trade

Front 23

International organization dealing with the rules of trade between nations

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World Trade Organization

Front 24

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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North American Free Trade Agreement

Front 25

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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European Union

Front 26

An international trade alliance that promotes open trade and economic and techincal cooperation among member nations

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Asia-Pacific Economic Cooperation

Front 27

An organization established by the industrialized nations in 1946 to loan money to underdeveloped and developing countries; formally known as teh International Bank for Reconstruction and Development

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World Bank

Front 28

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

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International Monetary Fund

Front 29

Includes exporting and importing, trading companies, licensing and franchising, contract manufacturing, outsourcing, joint ventures and alliances, and direct investment

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Levels of organizational involvement in international trade

Front 30

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

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Countertrade agreements

Front 31

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

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Trading company

Front 32

A trade agreement in which one company--the licensor--allows another company--the licensee--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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Licensing

Front 33

A form of licensing in which a company--the franchiser--agrees to provide a franchisee a name, logo, methods of operation, advertising, 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

Back 33

Franchising

Front 34

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 firms name.

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Contract Manufactoring

Front 35

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

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Joint Venture

Front 36

A partnership formed to create competitive advantage on a worldwide basis

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Strategic Alliance

Front 37

The ownership of overseas facilities

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Direct investment

Front 38

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

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Multinational Corporation

Front 39

What are the two basic strategies used in international business?

Back 39

Multinational strategy and Global strategy (globalization)

Front 40

A plan, used by international companies, that involes customizing products, promotion, and distribution according to cultural, technological, regional, and national differences

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Multinational Strategy

Front 41

A strategy that involves standardizing products (and, as much as possible, their promotion and distribution) for the whole world, as if it were a single entity

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Global strategy (globalization)