FBLA Global Business – Flashcards
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Domestic Business
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The making, buying, and selling, of goods within a country
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International Business
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Refers to business activities needed for creating, shipping, and selling goods and services across national borders, also called foreign or world trade
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Absolute Advantage
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Exists when a country can produce a good or service at a lower cost than other countries
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Comparative Advantage
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A situation in which a country specializes in the production of a good or a service at which it is relatively more efficient
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Imports
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Items bought from other countries
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Exports
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Goods an services sold to other countries
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Foreign debt
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The amount of money a country owes to other countries
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Balance of trade
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The difference between a country's total exports and total imports
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Trade surplus
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If a country exports (sells) mort than it imports (buys), it is favorable
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Trade deficit
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If a country imports more than it exports, it is unfavorable
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Balance of payments
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The difference between the amount of money that comes into a country and the amount that goes out of it
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Favorable balance of payments
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Occurs when a nation receives more money in a year than it pays out, also called positive balance of payments
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Unfavorable balance of payments
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The result of a country sending more money out than it brings in, also called negative balance if payments
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Foreign exchange market
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Consists of banks that buy and sell different currencies
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Exchange rate
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The value of a currency in one country compared with the value of another
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Interest rates
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The cost of using someone else's money
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Culture
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the accepted behaviors, customs, and values of a society
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Infrastructure
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Refers to a nation's transportation, communication, and utility systems
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Trade barriers
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Restrictions to free trade
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Formal trade barriers
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Trade barriers created by the government
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Informal trade barriers
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Restrictions based on a country's culture, traditions, and religion
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Quota
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A limit on the quantity of a product that may be imported or exported within a given period, used to protect one from its industries from too much competition from abroad
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Tariff
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Tax that a government places on certain imported products, intends to protect from foreign competition
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Embargo
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Stops the export or import of a product completely, used by government to express its disapproval of the actions or policies of another country
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Free trade zone
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A selected area where products can be imported duty-free and the stored, assembled, and/or used in manufacturing
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Free trade agreement
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Members to agree to remove duties, also called import taxes, and trade barriers on products traded among them
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Common market
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Members do away with duties and other trade barriers, allows companies to work freely across borders, also called an economic community
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Multinational company
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An organization that does business in several countries
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Home country
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Parent company with divisions or separate companies in host countries
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Host country
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The country in which the MNC places business activities
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Global strategy
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Uses the same product and marketing worldwide, same product is sold essentially in the same manner throughout the world
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Multinational strategy
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Treats each country market differently, develops products and marketing strategies that adapt to the customs, tastes, and buying habits of a distinct national market
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Licensing
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The selling rights to use some intangible property (production process, trademark, or brand name) for a fee or royalty, involves a manufacturing process
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Franchise
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The right to use a company name or business process in a specific way, involves selling a product or service
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Joint venture
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An agreement between two or more companies to share a business project
