Intro To Business Chapter 3

Business Chapter 3
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international business
all business activities that involve exchange across national boundaries
absolute advantage
the ability to produce a specific product more efficiently than any other nation
comparative advantage
the ability to produce a specific product more efficiently than any other product
selling and shipping raw materials or products to other nations
purchasing raw materials or products in other nations and bringing them into one's own country
balance of trade
the total value of a nation's exports minus the total value of its imports over some period of time
trade deficit
a negative balance of trade
balance of payments
the total flow of money into a country minus the total flow of money out of that country over some period of time
import duty (tariff)
a tax levied on a particular foreign product entering a country
exportation of large quantities of a product at a price lower than that of the same product in the home market
nontariff barrier
a nontax measure imposed by a government to favor domestic over foreign suppliers
import quota
a limit on the amount of a particular good that may be imported into a country during a given period of time
a complete halt to trading with a particular nation or in a particular product
foreign-exchange control
a restriction on the amount of a particular foreign currency that can be purchased or sold
currency devaluation
the reduction of value of a nation's currency relative to the currencies of other countries
World Trade Organization (WTO)
powerful successor to GATT that incorporates trade in goods, services, and ideas
economic community
organization of nations formed to promote the free movement of resources and products among its members and to create common economic policies
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
letter of credit
issued by a bank on request of an importer stating that the bank will pay an amount of money to a stated beneficiary
bill of lading
document issued by a transport carrier to an exporter to prove that merchandise has been shipped
exporter's bank, ordering the importer's bank to pay for the merchandise, thus guaranteeing payment once accepted by the importer's bank
strategic alliance
a partnership formed to create competitive advantage on a worldwide basis
trading company
provides a link between buyers and sellers in different countries
an international barter transaction
multinational enterprise
a firm that operates on a worldwide scale without ties to any specific nation or region
Export-Import Bank of the United States
an independent agency of the US government whose function it is to assist in financing the exports of American firms
multilateral development bank (MDB)
an internationally supported bank that provides loans to developing countries to help them grow
International Monetary Fund (IMF)
an international bank with 184 member nations that makes shortterm loans to developing countries experiencing balance-of-payment deficits

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