COMMERCE 1E03 - Chapter 5

Competing In Global Markets

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Side ASide B
Selling goods and services to another country
Buying goods and services from another company
The movement of goods and services among nations without political or economic obstruction
Free Trade
Theory that states that a country should sell to other countries those products that it produces...
Comparative Advantage Theory
The advantage that exists when a country has the ability to produce a particular good or service...
Absolute Advantage 
A nation's ratio of exports to imports
Balance of Trade
Occurs when the value of a country's imports exceeds that of its exports
Trade Deficit Unfavourable Balance of Trade
The difference between money coming into a country (from exports) and money leaving the country...
Balance of Payments
A global strategy in which a firm allows a foreign company to produce its product in exchange...
A foreign country's production of private-label good to which a domestic company then attaches...
Contract Manufacturing Outsourcing
A partnership in which two or more companies join to undertake a major project or to form a...
Joint Venture
A long-term partnership between two or more companies established to help each company build...
Strateigic alliance
The buying of permanent property and businesses in foreign nations
Foreign Direct Investment
A company owned in a foreign company by the parent company
Foreign Subsidiary
An organization that manufactures and markets products in many different countries and has...
Multinational Corporation
The set of values, beliefs, rules, and institutions held by a specific group of people
An attidude that one's own culture is superior to all others
The value of one nation's currency relative to the currencies of other countries
Exchange Rate
Lowering the values of a nation's currency relative to other currencies
A complex form of bartering in which several countries may be involved, each trading goods...
The use of government regulations to limit the import of goods and services
Trade Protectionism
Selling products in a foreign country at lower prices than tose charge in the producing country
A limit on the number of products in certain categories that a nation can import
Import Quota
A complete ban on the import or export of a certain product or the stopping of all trade with...
A 1948 agreement that established an international forum for negotiating mutual regulations...
General Agreement on Tariffs and Trade
The international organization that replaced the General Agreement on Tariffs and Trade, and...
World Trade Organization 
An international bank that makes short-term loans to countries experiencing problems with their...
International Monetary Fund
An autonomous United Nations agency that borrows money from the more prosperous countries and...
World Bank
Organizations of commodity-producing countries that are formed to stabilize or increase prices...
Producers' Cartels
A regional group of countries that have a common external tarriff, no internal tariffs, and...
Common Market
Agreement that created a free-trade area among Canada, the United States, and Mexico
North American Free Trade Agreement

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