POBF: Intro to Business: Chapter 3 – Business in the Global Economy – Flashcards
Unlock all answers in this set
Unlock answersquestion
balance of payments
answer
The difference between a country's total payments to other countries and its total receipts from other countries.
question
balance of trade
answer
The difference between a country's total exports and total imports of goods.
question
embargo
answer
Stopping the importing or exporting of a certain product or service.
question
exchange rate
answer
The value of money of one country expressed in terms of the money of another country.
question
exports
answer
Goods and services sold to another country.
question
infrastructure
answer
A nation's transportation, communication, and utility systems.
question
joint venture
answer
An agreement between two or more companies from different countries to share a business project.
question
multinational company (MNC)
answer
An organization that conducts business in several countries.
question
quota
answer
A limit on the quantity of a product that may be imported and exported within a given period.
question
tariff
answer
A tax that a government places on certain imported products.
question
trade barrier
answer
Government restrictions to reduce free trade.
question
imports
answer
Goods and services bought from another country.
question
International Development Association (IDA)
answer
Makes loans to help developing countries.
question
World Trade Organization (WTO)
answer
Created in 1995 to promote trade around the world. With over 150 member countries, this organization settles disputes and enforces free-trade agreements between its members.
question
franchise
answer
Right to use a company name of business process in a specific way.
question
licensing
answer
Selling the right to use some intangible property (production process, trademark, or brand name) for a fee or royalty. Example: The Gerber Company started selling its baby food products in Japan by this means.
question
free-trade zone
answer
A selected area where products can be imported duty-free and then stored, assembled, and/or used in manufacturing.
question
free-trade agreement
answer
Member countries agree to remove duties and trade barriers on products traded among them. This results in increased trade between the members.
question
International Monetary Fund (IMF)
answer
Helps promote economic cooperation among its 150 nations and maintains an orderly system of world trade and exchange rates. It was established in 1946 when the economic interdependence among nations was growing at a greater pace than ever before in history.
question
World Bank
answer
The International Bank for Reconstruction and Development and is commonly called ____ _____. It was created in 1944 to provide loans for rebuilding after World War II. Today, its key function is to give economic aid to less developed countries.
question
Absolute advantage
answer
Exists when a country can produce a good or service at a lower cost than other countries. This may exist as a result from an abundance of natural resources or raw materials in a country. Example: South American countries have an absolute advantage in coffee production, and Saudi Arabia has an absolute advantage in oil production.
question
Comparative advantage
answer
Exists when a country specializes in the production of a good or service at which it is relatively more efficient.
