32 terms

Chapter 4

international trade
the exchange of goods and services among nations
goods and services purchased from other countries
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
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
limits either the quantity or the monetary value of a product that may be imported
a total ban on specific goods coming into and leaving a country
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
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
large corporations that have operations in several countries
midsize or smaller companies that have operations in foreign countries
selling the same product and using the same promotion methods in all countries
changing an existing product and/or promotion to better suit the characteristics of a country or region
specially designing products or promotions for certain countries or regions
having possibility or capability.
the basic facilities and services that support a community
belonging to a corporation
direct one's attention on something