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63 Cards in this Set
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- Back
- 3rd side (hint)
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Global vision |
The recognition and reaction to international business opportunities, being aware of threats from foreign competitors, effectively using distribution networks to get raw materials and ship finished products |
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Import |
Goods/services bought from other countries |
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Exports |
Goods and services made by a country that are sold to others |
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Balance of trade |
Difference between the value of a country's exports of the value of its imports during a specific time |
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Trade surplus |
A country that exports more than and imports [favourable balance of trade] |
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Trade deficit |
A country that imports more than it exports [unfavourable balance of trade] |
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Balance of payments |
The summary of a country's International financial transactions showing the difference between the country's total payments to and receipts from other countries |
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Floating exchange rates |
Currency prices float up-and-down based on the demand for and supply of each currency; based on currency's investments, trade potential, economic strength |
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Devaluation |
When a nation lowers the value of its currency relative to other currencies |
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Absolute advantage |
When a country can produce and sell a product at a lower cost than any other country [sorta like a monopoly] |
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Comparative advantage |
The principle wherein each country should specialized in the products that it can produce most readily and cheaply and trade those products for goods that other countries can produce most readily and cheaply |
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Free trade |
Policy of permitting the people and businesses of a country to buy and sell where they please without restriction |
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Protectionism |
Where in a nation protects its home industries from outside competition by establishing tariffs and quotas |
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WTO |
World Trade Organization |
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Outsourcing |
Sending domestic jobs to another country |
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Tariff |
A tax imposed by a nation on imported goods; can be a % or charge per unit |
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Protective tariffs |
Make import products less attractive to buyers than domestic products |
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Import quota |
Limits on quantity of a good that can be imported |
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Embargo |
A complete ban of a certain product (ex. US military tech) |
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Buy-national regulations |
Government rules that give special privileges to domestic manufacturers and retailers |
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Exchange controls |
Laws that require a company earning foreign exchange from its exports to sell that foreign exchange to a control agency (like a central bank) |
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Dumping |
The practice of charging a lower price for a product in foreign markets than in the firm's home market; a way to win foreign consumers or get rid of surplus |
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Predatory dumping |
The attempt to gain control of a foreign market by destroying competitors with impossibly low prices |
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Uruguay Round |
An agreement of trade negotiations that dramatically lowers trade barriers worldwide adopted in 1994 signed by 148 nations |
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Doha Round |
A followup negotiation started in 2001 in Quatar |
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World Trade Organization |
Replaced the General Agreement on Tariffs and Trade (GATT). The world's most powerful institution for reducing trade barriers and opening markets |
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What countries are NOT part of the WTO? |
N Korea, Turkmenistan, Eritrea |
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World Bank (WB) |
Offers low interest loans to developing nations to help build infrastructure and relieve debt burdens; acts as a source of advice and information |
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International Monetary Fund (IMF) |
Found in 1945 to promote trade through financial cooperation and eliminate trade barriers; makes short term loans to member nations unable to meet budgetary expense; A last resort option |
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Preferential tariff |
A trade agreement that gives advantages to one or several nations over others; ex: former British colonies trading with Great Britain |
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Free trade zone |
A type of free trade association where few duties or rules restrict trade among the partners but nations outside the zone must pay the tariffs set by the individual members |
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North American free trade agreement (NAFTA) |
The world's largest free trade zone ratified in 1993 including Canada the US and Mexico |
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What must NAFTA provide Mexico to deliver rising prosperity? |
Rising wages, better benefits, and an expanding middle class with enough purchasing power to keep buying goods from member nations |
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Mercosur |
The largest new trade agreement including Peru, Brazil, Argentina, Uruguay, and Paraguay |
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Central America Free Trade Agreement (CAFTA) |
Newest free trade agreement passed in 2005. This includes the US, kosta rika, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua |
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European Union [EU) |
An integrative system toward monetary economic and political unity by creating a borderless economy for the 28 European nations to develop a unified European market |
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Members of the EU |
Austria Belgium Bulgaria Croatia Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Malta the Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden and the United Kingdom |
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Candidate countries for the EU |
Albania Montenegro Serbia Turkey and the former Yugoslav Republic of Macedonia |
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European integration |
The pooling of sovereignty where EU members set up common institutions to delegate some decisions of joint interests democratically |
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EU principal objectives |
Promote economic progress of all member countries, creating a community bank, opening of markets, and anti-trust enforcement |
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Maquiladora |
A factory in Mexico run by a foreign company exporting its products to the country of that company. A way for that company to be duty and tariff free. Often has worse conditions for employees. |
Maquiladoras-educateyourself.weebly.com |
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Exports |
Selling domestically produced products to buyers in another country |
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Licensing |
The legal process whereby a firm agrees to let another firm use a manufacturing process trademark patent trade secret or other proprietary knowledge |
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Licensor |
The firm agreeing to let another firm use a process/product/etc |
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Licensee |
The firm that pays the license or a royalty or fee agreed upon by both parties to use proprietary knowledge belonging to the licensor |
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Franchising |
A form of licensing that operates outlets or locations based upon an agreement with a parent company licensor |
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Examples of licensing |
Often include fast food restaurants and Business Services like McDonald's home depot and Subway |
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Contract manufacturing |
A foreign firm manufacturing private label goods under a domestic firm's brand |
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Joint venture |
A domestic firm buying a part of a foreign company or joining with a foreign company to create a new entity as a quick and inexpensive way to enter the global market |
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Direct foreign investment |
The active ownership of a foreign company of overseas manufacturing or marketing facilities |
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Countertrade |
Where part or all of the payment for goods or services is in the form of other goods or services- a form of barter |
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Nationalism |
The sense of national consciousness that boosts the culture and interests of one country over those of all others; Extreme cases can cause racism, see America |
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Expropriate |
Where in a government may take a foreign company's assets claiming ownership and compensating the former owners |
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Confiscation |
As in expropriation, but receiving no compensation |
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Cultural differences |
Sets of values, social moray, language, customs and traditions. These can help determine business practices and influence negotiations with foreign customers |
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Infrastructure |
The basic institutions and public facilities upon which not coneni's development depends-for example, money and banking systems and methods of transport and communication |
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Gross national income |
The value of the final goods and services produced by a country together with its income received from other countries with subtracted similar payments made to other countries |
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Final Goods |
The goods ultimately consumed rather than used in the production of another good |
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Multinational corporations |
Corporations that move resources goods services and skills across national boundaries without regard to the country in which their headquarters are located |
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Examples of large multinational corporations |
Exxon, Walmart, Coca-Cola, Gillette |
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Advantages of being multinational |
Can overcome trade problems, ability to sidestep regulatory problems, Can shift production from one plant to another as market conditions change |
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Reasons for world trade |
Market expansion and resource acquisition |
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China and India |
2 large emerging global economic players in our current marketplace |
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