| Term | Definition |
|---|
| international trade | the exchange of goods and services among nations |
| imports | goods and services purchased from other countries |
| exports | goods and services sold to other countries |
| absolute advantage | occurs when a country has natural resources or talents that allow it to produce an item at the lowest cost possible |
| comparative advantage | the value that a nation gains by selling what it produces most efficiently |
| balance of trade | the difference in value between exports and imports of a nation |
| trade deficit | occurs when a nation imports more than it exports |
| trade surplus | occurs when a nation exports more than it imports |
| free trade | commercial exchange between nations that is conducted on free market principles, without restrictive regulations |
| tariff | a tax on imports |
| revenue-producing tariff | used to produce revenue for a country |
| protective tariff | used to increase the price of imported goods so that domestic products can compete with them |
| quota | limits either the quantity or the monetary value of a product that may be imported |
| embargo | a total ban on specific goods coming into and leaving a country |
| protectionism | a government's establishment of economic policies that systematically restrict imports in order to protect domestic industries |
| (WTO) World Trade Organization | a coalition of nations that makes rules governing international trade |
| (NAFTA) North American Free Trade Agreement | an international trade agreement among the United States, Canada, and Mexico |
| (EU) European Union | established free trade among the European member nations and a central bank |
| licensing | involves letting another company use a trademark, patent, specific formula, company name, or some other intellectual property for a fee or royalty |
| franchise agreement | a franchisor grants the franchisee the rights to operate under the company name |
| contract manufacturing | involves hiring a foreign manufacturer to make your products, according to your specifications |
| joint venture | a business enterprise that companies set up together |
| (FDI) Foreign Direct Investment | the establishment of a business in a foreign country |
| multinationals | large corporations that have operations in several countries |
| mini-nationals | midsize or smaller companies that have operations in foreign countries |
| globalization | selling the same product and using the same promotion methods in all countries |
| adaptation | a company's use of an existing product and/or promotion to which changes are made to better suit the characteristics of a country or region |
| customization | involves creating specially designed products or promotions for certain countries or regions |
Combine with other sets
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