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international business |
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all business activities that involve exchange across national boundaries |
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absolute advantage |
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the ability to produce a specific product more efficiently than any other nation |
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comparative advantage |
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the ability to produce a specific product more efficiently than any other product |
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exporting |
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selling and shipping raw materials or products to other nations |
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importing |
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purchasing raw materials or products in other nations and bringing them into one's own country |
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balance of trade |
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the total value of a nation's exports minus the total value of its imports over some period of time |
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trade deficit |
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a negative balance of trade |
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balance of payments |
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the total flow of money into a country minus the total flow of money out of that country over some period of time |
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import duty (tariff) |
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a tax levied on a particular foreign product entering a country |
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dumping |
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exportation of large quantities of a product at a price lower than that of the same product in the home market |
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nontariff barrier |
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a nontax measure imposed by a government to favor domestic over foreign suppliers |
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import quota |
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a limit on the amount of a particular good that may be imported into a country during a given period of time |
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embargo |
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a complete halt to trading with a particular nation or in a particular product |
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foreign-exchange control |
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a restriction on the amount of a particular foreign currency that can be purchased or sold |
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currency devaluation |
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the reduction of value of a nation's currency relative to the currencies of other countries |
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World Trade Organization (WTO) |
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powerful successor to GATT that incorporates trade in goods, services, and ideas |
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economic community |
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organization of nations formed to promote the free movement of resources and products among its members and to create common economic policies |
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Licensing |
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agreement in which one firm permits another to produce and market its product and use its brand name in return for a royalty or other compensation |
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letter of credit |
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issued by a bank on request of an importer stating that the bank will pay an amount of money to a stated beneficiary |
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bill of lading |
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document issued by a transport carrier to an exporter to prove that merchandise has been shipped |
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draft |
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exporter's bank, ordering the importer's bank to pay for the merchandise, thus guaranteeing payment once accepted by the importer's bank |
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strategic alliance |
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a partnership formed to create competitive advantage on a worldwide basis |
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trading company |
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provides a link between buyers and sellers in different countries |
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countertrade |
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an international barter transaction |
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multinational enterprise |
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a firm that operates on a worldwide scale without ties to any specific nation or region |
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Export-Import Bank of the United States |
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an independent agency of the US government whose function it is to assist in financing the exports of American firms |
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multilateral development bank (MDB) |
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an internationally supported bank that provides loans to developing countries to help them grow |
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International Monetary Fund (IMF) |
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an international bank with 184 member nations that makes shortterm loans to developing countries experiencing balance-of-payment deficits |
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