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domestic business

the making, buying, and selling of goods and services within a country

international business

business activities needed for creating, shipping, and selling goods and services across national borders

foreign trade

international business

absolute advantage

a country can provide a good or service at a lower cost than other countries

comparative advantage

a country specializes in the production of a good or service at which it is relatively more efficient

imports

items bought from other countries

exports

goods and services sold to other countries

foreign debt

the amount a country owes to other countries

balance of trade

the difference between a country's total exports and total imports

trade surplus

a country exports more than it imports

trade deficit

a country imports more than it exports

balance of payments

the difference between the amount of money that comes into a country and the amount that goes out of it

positive balance of payments

a nation receives more money in a year than it pays out

negative balance of payments

a country sends out more money than it brings in

ruble

Russian currency

euro

European Union currency

real

Brazilian currency

rupee

Indian currency

riyal

Saudi Arabian currency

foreign exchange market

the process of exchanging one currency for another occurs here

exchange rate

the value of a currency in one country compared with the value in another

interest rates

the cost of using someone else's money

culture

the accepted behaviors, customs, and values of a society

infrastructure

a factor that supports international trade in industrialized countries, including a nation's transportation, communication, and utility systems

trade barriers

restrictions to free trade

quota

a limit on the quantity of a product that may be imported or exported within a given period

tariff

a tax that a government places on certain imported products

embargo

when a government stops an export or import of a product completely

free-trade zone

a selected area where products can be imported duty-free

free-trade agreement

member countries agree to remove duties and trade barriers on products traded among them

common market

members do away with duties and other trade barriers

economic community

another word for common market

multinational company

an organization that does business in several countries

home country

where the MNC parent company is located

host country

the country where MNC places business activites

global strategy

the same product and marketing strategy worldwide

multinational strategy

each country market is treated differently

licensing

selling the right to use some intangible property (ex: trademark or brand name)

franchise

the right to use a company name or business process in a specific way

joint venture

an agreement between two or more companies to share a business project

World Trade Organization

promotes world trade around the world; settles trade disputes and enforces free-trade agrements

International Monetary Fund

helps to promote economic cooperation

World Bank

gives economic aid to less developed countries

International Development Association

makes loans to help developing countries

International Finance Corporation

provides capital and technical help to private businesses in nations with limited resources

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