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20 Cards in this Set
- Front
- Back
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Reasons for international trade Access to factors of production |
International trade helps even out the resource imbalances among nations |
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Reasons for international trade Reduced risk |
Global trade reduces dependence on one economy, lowering the risk for multinational firms |
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Reasons for international trade Inflow of inovation |
International trade is a source of new ideas for companies |
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Opportunity cost |
The opportunity of giving up second-best choice when making a decision |
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Absolute advantage |
A country has this when it can produce more of a good than other nations, using the same amount of resources |
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Comparative advantage |
Benefit a country has in a given industry if it can make products at a lower opportunity cost than other countries |
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Tools for measuring international trade |
Balance of trade, balance of payment, exchange rates, countertrade |
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Strategies for reaching goals |
Foreign outsourcing, importing, exporting |
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Foreign licensing |
Authority given by a domestic firm to a foreign firm for the right to produce and market it's product rights in a defined area |
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Foreign franchising |
Firm expands by offering business in other countries the right to produce and market it's products according to specific operation requirements |
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Direct investment |
Firms acquire foreign firms or develop new facilties from ground up in foreign countries |
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Joint ventures |
Companies join forces to pursue specific opportunities |
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Partnership |
Agreement in which two or more people act as co-owner of a business or profit |
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Strategic alliance |
Agreement between two or more firms to jointly pursue a specific opportunity without actually merging their business |
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Barrier for international trade |
Sociocultural differences, economic differences, political and legal differences |
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Protectionism |
National policies designed to restrict international trade |
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Tariffs |
Taxes levied against imports |
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Quotas |
Limitations on the amount of specific products that may be imported |
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Voluntary export restrains |
Limitations on the amount of specicif products that one nation will export to another nation |
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Embargo |
Complete ban on international trade of a certain item or with a particular nation |
