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world trade

the flow of goods and services among different countries-the value of all the exports and imports of the world

counter trade

a type of trade in which goods are paid for with other items instead of with cash

general agreements of tariffs and trade (GATT)

international treaty to reduce import tax levels and trade restrictions

world trade organization (WTO)

an organization that replaced gatt the wto sets trade rules for its member nations and mediates disputes between them


a policy adopted by a government to give domestic companies an advantage

import quotas

limitations set by a government on the amount of a product allowed to enter or leave a country


a quota completely prohibiting specific goods from entering or leaving a country


taxes on imported goods

developing countries

countries in which the economy is shifting its emphasis from agriculture to industry

BRIC countries

refers to Brazil, Russia, India, and China, the largest and fastest growing of the developing countries with over 40 percent of the worlds population

developed country

a country that boasts sophisticated marketing systems, strong private enterrpriise, and bountiful market potential for many goods and services

group of 8 (G8)

an informal forum of the eight most economically developed countries that meets annually to discuss major economic and political issues facing the international community

business cycle

the overall patterns of change in the economy-including periods of prosperity, recession, depression, and recovery-that affect consumer and business purchasing power

competitive intelligence (CI)

the process of gathering and analyzing publicly available information about rivals

discrectionary income

the portion of income people have left over after paying for necessities such as housing, utilities, food, and clothing

product competition

when firms offering different products compete to satisfy the same consumer needs and wants

brand competition

when firms offering similar goods or services compete on the basis of their brands reputation or perceived benefits


a market situation in which one firm, the only supplier of a particular product is able to control the price, quality, and supply of that product


a market structure in which a relatively small number of sellers, each holding a substantial share of the market, compete in a market with many buyers

monopolistic competition

a market structure in which many firms, each having slightly different products, offer unique consumer benefits

perfect competition

a market structure in which many small sellers, all of whom offer similar products, are unable to have an impact on the quality, price, or supply of a product


when a domestci government reimburses a foreign government


when a domestic government seizes a foreign company's assets without any reimbursement

local content rules

a form of protectionism stipulating that a certain proportion of a product must consist of components supplied by industries in the host country or economic community

U.S. Generalized System of Preferences (GSP)

a program to promote economic growth in developing countries by allowing duty-free entry of goods into the U.S.


statistics that measure observable aspects of a population, including size, age, gender, ethnic group, income, education, occupation, an family structure

cultural values

a society's deeply held beliefs about right and wrong ways to live

collectivist cultures

cultures in which people subordinate their personal goals to those of a stable community

individual cultures

cultures in which people tend to attach more importance to personal goals than to those of the larger community

social norms

specific rules dictating what is right or wrong, what is acceptable or unacceptable


the tendency to prefer products or people of one's own culture


when someone voluntarily offers payment to get an illegal advantage


when someone in authority extracts payment under duress

export merchants

intermediaries a firm uses to represent it in other countries

licensing agreement

an agreement in which one firm gives another firm the right to produce and market its produce in a specific country or region in return for royalties


a form of licensing involving the right to adapt an entire system of doing business

strategic alliance

relationship developed between a firm seeking a deeper commitment to a foreign market and a domestic firm in the target country

joint venture

a strategic alliance in which a new entity owned by two or more firms allows the partners to pool their resources for common goals

straight extension strategy

product strategy in which a firm offers the same product in both domestic and foreign countries

product adaptation strategy

product strategy in which a firm offers a similar but modified product in foreign markets

product invention strategy

product strategy in which a firm develops a new product for foreign markets

backward invention strategy

product strategy in which a firm develops a less advance product to serve the needs of people living in countries without electricity or other elements of a developed infrastructure

free trade zones

designated areas where foreign companies can warehouse goods without paying taxes or customs duties until they move the goods into the marketplace

grey market goods

items manufactured outside a country and then imported without the consent of the trademark holder


a company tries to get a toehold in a foreign market by pricing its products lower than it offers them at home

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