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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 policies that 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

letting another company use a trademark, patent, specific formula, company name, etc. 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

changing an existing product and/or promotion to better suit the characteristics of a country or region

customization

specially designing products or promotions for certain countries or regions

potential

having possibility or capability.

infrastructure

the basic facilities and services that support a community

corporate

belonging to a corporation

focus

direct one's attention on something

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