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bus 1e vobVI

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Global business
Any activity that seeks to provide goods and services to others across national borders at a profit
Exporting
Selling products to another country
Importing
Buying products from another country
Free trade
The movement of goods and services amongs nations without political or economic trade barriers
Global trade
The exchange of goods and services across national borders
Comparative advantage theory
A theory that states that a country should sell to other countries those products that it produces most effectively and efficiently and buy from other countries those products that it cannot products as effectively or efficiently
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
Balance of trade
The total value of a nation's exports compared to its imports measured over a particular period
Trade surplus
A favorable balance of trade; occurs when the value of a country's exports exceeds that of its imports
Trade deficit
An unfavorable balance of trade; occurs when value of a country's imports exceeds that of its exports
Balance of payments
The difference between money coming into a country (from exports) and money leaving the country (for imports) plus money flows from other factors, such as tourism, foregin aid, military expenditures, and foreign investment
Dumping
Selling products in a foreign country at lower prices than those charged in the producing country
Gray market
The flow goods in a distribution channel or channels other than those intended by the manufacturer or licensor
Trade protectionism
The use government regulations to limit the import of goods and services
Tariff
A tax on imports
Harmonized tariff schedule
A schedule of costs for every product from every country that is published by the U.S. government
Import quota
A protectionist policy that limits the number of products in certain categories that a natin can import
Embargo
A complete ban on the import or export of a certain product o the stopping of all trade with a particular country
Nontariff barriers
Restrictive standards that details exactly how a product must be sold in a country
General agreement on tariff and trade (GATT)
A 1948 agreement that established an international forum for negotiating mutual reductions in trade restrictions
World trade orgaization (WTO)
The international organization that replaced the General Agreement on Tariffs and Trade and was assigned the duty of mediating trade disputes among nations
Common market (trading bloc)
A regional group of countries that have a common external tariff, no internal tariffs, and coordinated laws that aid trade among member countries
European union (EU)
A agreement among European member countries to eventually reduce all barriers to trade and become unified, both economically and politically
The organization of the petroleum exporting countres (OPEC)
An organization of 13 oil producing nations that work together to protect their interests
North american free trade agreement (NAFTA)
An agreement that created a free trade area among the United State, Canada,and Mexico
Licensing
A global strategy in which a firm (the licensor) allows a foreign company (the licensee) to produce its product in exchange for a fee (a royalty)
Contract manufacturing
A foreign country's production of private-label goods to which a domestic company then attaches its brand name or trademark; part of the broad category of outsourcing
Join venture
A partnership in which two or more companies (often from different countries) undertake a major project
Greenfield investment
A form of foreign direct investment in which a company builds factories and offices in a foreign country on its own
Strategic alliance
A long term partnership between two or more companies established to help each company build competitive market advantage
Foreign direct investment (FDI)
The buying of permanent property and business in foreign nations
Foreign subsidiary
A company owned in a foreign country by another company,called the parent company
Expropriation
When a host government takes over a foreign subsidiary in a country
Multinational corporation
An organization that manufactures and markets products in many different countries and has multinational management
Culture
The set of values, beliefs, rules, and institutions held by a specific group of people
Ethnocentriciy
An attitude that one's own culture is superior to other cultures
Exchange rate
The value of one nation's currency relative to the currencies of other countries
Countertrading
A complex form of bartering in which several countries may be involved, each trading goods for goods or services for services