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8 Cards in this Set
- Front
- Back
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Mercantilism |
An economic philosophy based on the belief that a nation's wealth depends on accumulated treasure, in precious metals like gold and silver |
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Absolute Advantage |
Theory that a nation has absolute advantage when it can produce a larger amount of good or service for the same amount of inputs as can another country |
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Comparative Advantage |
Theory that a nation having absolute disadvantages in the production of two goods with respect to another nation has a comparative or relative advantage in the production of the good in which its absolute disadvantage is less |
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Offshoring |
Locating activities in another nation |
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International Product Life Cycle |
A theory explaining why a product that begins as a nation's export eventually becomes its import |
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Economies of Scale |
Situation where the average cost of producing each unit of output decreases as a plant gets larger and output increases |
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Portfolio Investment (Foreign) |
The purchase of stocks and bonds to obtain a return on the funds invested |
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Direct Investment (Foreign ) |
The purchase of sufficient stock in a firm to obtain significant management control |
