Please enter something

Understanding Business–10th Edition–Chapter 3

question

importing
answer

buying products from oanoter country
question

exporting
answer

selling products to another country
question

free trade
answer

the movement of goods and services amon ations without political or economic barriers
question

comparative advantage theory
answer

theory that states that a country should sell to tother countries those products that it produces most effectviely and efficiently and buy from other countries those products that it cannot produce as effectively/efficiently
question

absolute advantage
answer

the advantage that exists when a country has a monopoly on producing a specific product or is able to produce it more effciently than all other countries
question

balance of trade
answer

the total value of a nation’s exports compared to its imports measured over a particular period
question

trade surplus
answer

a favorable balance of trade, occurs when teh value of a country’s exports that of its imports
question

trade deficit
answer

an unfavorable balance of trade, occurs when the value of a country’s imports exceeds that of its exports
question

balance of payments
answer

difference between money coming into a country (from exports) and money leaving the country (from imports) plus money flows from other factors such as tourism, foreign aid, military expenditures, and foreign investment
question

dumping
answer

selling products in a foregin country at lower prices than those charged in the producing country
question

licensing
answer

a global strategy in which a firm (the licensor) allows a foreign company (the licensee) to produce its product in exchange for a fee (royalty)
question

contract manufacturing
answer

foreign country’s production of a private label goods to which a domestic company then attaches its brand name or trademark, part of the broad category of outsourcing
question

joint venture
answer

a partnership in which two or more companies (often from different countries) join to undertake a major project
question

strategic alliance
answer

long term partnership between two or more companies established to help each company build competitive market advantages
question

foreign direct investment (FDI)
answer

buying of permanent property and businesses in foreign nations
question

foreign subsidiary
answer

company owned in a foreign country by another company, called the parent company
question

multinational corportation
answer

an organization that manufactures and markets products in many countries and has multinational stock ownership and multinational management
question

sovereign wealth funds (SWFs)
answer

investment funds controlled by governments holding large stakes in foreign companies
question

exchange rate
answer

value of one nation’s currency relative to the currencies of other countries
question

devaluation
answer

lowering the value of a nation’s currency relative to other currencies
question

countertrading
answer

a complex form of bartering in which several countries may be involved, each trading goods for goods or services for services
question

trade protectionism
answer

the use of government regulations to limit the import of goods and services
question

tariff
answer

a tax imposed on imports
question

import quota
answer

a limit on the number of products in certain categories taht a nation can import
question

embargo
answer

a complete ban on the import or export of a certain product, or stopping of all trade with a particular country
question

General agreement on tariffs and trade (GATT)
answer

1948 agreement that established an international forum for negotiating mutual reductions in trade restrictions
question

World trade organization (WTO)
answer

international organization that replaced the GATT and was assigned te duty to mediate trade disputes among nations
question

common market
answer

regional group of countries that have common external tariff, no internal tariffs, and a coordination of laws to facilitate exchange, also called a trading bloc. (European Union)
question

North American free trade agreement (NAFTA)
answer

agreement that created free trade area among US, Canada, and Mexico
question

North American free trade agreement (NAFTA)
answer

agreement that created free trade area among US, Canada, and Mexico