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This quiz covers vocabulary learned from Day 1 through Day 4 of International Business Unit Plan. SEED 450

International Business

Includes all of the business activities necessary for creating, shipping, and selling goods and services across national borders


The selling and shipping of products to another country


The commercial activity of buying and bringing in goods from a foreign country

Free Trade

The movement of goods and services among nations without political or economic barriers.

Comparative Advantage

The ability to produce a product most efficiently given all the other products that could be produced

Absolute Advantage

The advantage that exists when a country has a monopoly on producing a specific product or is able to produce it more efficiently than all other countries.

Management Contracting

Also known as outsourcing, where a foreign country produces a private-labeled good to which a domestic company then attaches its brand name or trademark


Occurs when a firm (the licensor) grants a foreign entity (the licensee) the right to produce its product, use its production processes, or use its brand name or trademark in return for a royalty fee on every unit sold


An organization gives another organization the right to use its name and operating methods.

Joint Venture

A partnership between a domestic firm and a foreign firm or government to undertake a major project

Foreign Direct Investment

Practice of buying permanent property and businesses in foreign nations.

Foreign Subsidiary

A company owned in a foreign country by another company, called the parent company.

Balance of Trade

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

Trade Deficit

When a country imports more than it exports


Selling products in a foreign country at lower prices than those charged in the producing country

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