chapter 3
Terms
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- trade deficit
- occurs when the value of the country's exports exceeds that of its imports
- contract manufacturing
- involves a foregin company producing private-label goods to which a domestic company then attaches its own brand name or trademark
- exporting
- is selling products to another country
- North American Free Trade Agreement
- created a free-trade area among the United States, Canada, and Mexico
- licensing
- the right to manufacture its products or use its trademark to a foreign company for a fee
- free trade
- is the movemtn of goods and services among nations without political or economic barriers
- absolute advantage
- if it has a monopoly on producing a specific product or is able to produce it more efficiently than all other countries
- multinational corporation
- an organization that manufacturers and markets products in many different counrties and has multinational stock ownership and multinational management
- trade protectionism
- is the use of government regulations to limit the import of goods and services
- embargo
- is a complete ban on the import or export of a certain product of the stopping of all trade with a particular country
- importing
- buying products from another country
- Common market
- is a regioal gropu of countries that have a common external tariff, no internal tariffs, and the coordinations of laws to facilitate exchange among member countries
- foreign subsidiary
- is a company that is owned in a foreign country by another company
- balance of trade
- is the total value of a nations exports compared to its imports measured over a particular period
- exchange rate
- is the value of one nations currency relative to the currencies of other countries
- Foreign direct investment
- is the buying of permanent property and businesses in foreign nations
- strategic alliance
- is a long-term partnership between two or more companies established to help each company build competitive market advantages
- countertrading
- a complex form of bartering in which several countries may be involved , each trading goods and services for services
- General Agreement on Tariffs and Trade
- an international forum for negotiating mutual reductions in trade restrictions
- import quota
- limits the number of products in certain categories that a nation can import
- World Trade Organization
- to assume the task of mediating trade disputes among nations
- tariffs
- taxes on imported goods
- comparative advantage theory
- states that a country should sell to other countries those products that it produces most effectively
- devaluation
- is lowering the value of a nation's currency relative to other countries
- joint venture
- basically a partnership in which two or more companies join to undertake a major project
- dumping
- is the practice of selling products in a foreign country at lower prices than those charged in the producing country
- balance of payments
- is the difference between money coming into a country and money leaving