POBF: Intro to Business: Chapter 3 – Business in the Global Economy

Flashcard maker : Lily Taylor
balance of payments
The difference between a country’s total payments to other countries and its total receipts from other countries.
balance of trade
The difference between a country’s total exports and total imports of goods.
Stopping the importing or exporting of a certain product or service.
exchange rate
The value of money of one country expressed in terms of the money of another country.
Goods and services sold to another country.
A nation’s transportation, communication, and utility systems.
joint venture
An agreement between two or more companies from different countries to share a business project.
multinational company (MNC)
An organization that conducts business in several countries.
A limit on the quantity of a product that may be imported and exported within a given period.
A tax that a government places on certain imported products.
trade barrier
Government restrictions to reduce free trade.
Goods and services bought from another country.
International Development Association (IDA)
Makes loans to help developing countries.
World Trade Organization (WTO)
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.
Right to use a company name of business process in a specific way.
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.
free-trade zone
A selected area where products can be imported duty-free and then stored, assembled, and/or used in manufacturing.
free-trade agreement
Member countries agree to remove duties and trade barriers on products traded among them. This results in increased trade between the members.
International Monetary Fund (IMF)
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.
World Bank
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.
Absolute advantage
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.
Comparative advantage
Exists when a country specializes in the production of a good or service at which it is relatively more efficient.

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