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Chapter 3 The Global Marketplace
What is economic globalization?
The increasing integration and interdependence of national economies around the world.
What is economies of scale?
Savings from buying parts and materials, manufacturing, or marketing in large quantities.
What is balance of trade?
Total value of the products a nation exports minus the total value of the products it imports, over some period of time.
What is trade surplus?
A favorable trade balance created when a country exports more than it imports.
What is trade deficit?
An unfavorable trade balance created when a country imports more than it exports.
What is balance of payments?
The sum of all payments one nation receives from other nations minus the sum of all payments it makes to other nation, over some specified period of time.
What is exchange rate?
The rate at which the money of one country is traded for the money of another.
What is free trade?
International trade unencumbered by restrictive measures.
What is protectionism?
Government policies aimed at shielding a country's industries from foreign competition.
What are tariffs?
Taxes levied on imports.
What are import quotas?
Limits placed on the quantity of imports a nation will allow for a specific product.
What are export subsidies?
A form of financial assistance in which producers receive enough money from the government to allow them to lower their prices in order to compete more effectively in the global market.
What is dumping?
Charging less than the actual cost or less than the homecountry price for goods sold in other countries.
What are trading blocs?
Organizations of nations that remove barriers to trade among their members and that establish uniform barriers to trade with nonmember nations.
What is culture?
A shared system of symbols, beliefs, attitudes, values, expectations, and norms for behavior.
What is stereotyping?
Assigning a wide range of generalized attributes, which are often superficial or even false, to an individual based on his or her membership in a particular culture or social group.
What is ethnocentrism?
Judging all other groups according to the standards, behaviors, and customs of one's own group.
What is importing?
Purchasing goods or services from another country and bringing them into one's own country.
What is exporting?
Selling and shipping goods or services to another country.
What is licensing?
Agreement to produce and market another company's product in exchange for a royalty or fee.
What is foreign direct investment(FDI)?
Investment of money by foreign companies in domestic business enterprises.
What is multinational corporations (MNCs)?
Companies with operations in more than one country.
What is multidomestic strategy?
A decentralized approach to interational expansion in which a company creates highly independent operating units in each new country.
What is global strategy?
A highly centralized approach to international expansion, with headquarters in the home country making all major decisions.
What is transnational strategy?
A hybrid approach that attempts to reap the benefits of international scale while being responsive to local market dnamics.
What is embargo?
A total ban on trade with a particular nation (a sanction) or of a particular product.