The process by which the world economy is becoming a single interdependent system.
What is import?
A product made or grown abroad but sold domestically.
What is export?
A product made or grown domestically, but shipped and sold abroad.
What is trade deficit?
A situation in which a country's imports exceed its exports, creating a negative balance of trade.
What is trade surplus?
A situation in which a country's exports exceed its imports, creating a positive balance of trade.
What is a balance of payments?
flow of all money into or out of a country.
What is an exchange rate?
A rate at which the currency of one nation can be exchanged for the currency of another nation.
What is Euro?
A common currency shared among most of the members of the EU.
What is an absolute advantage?
An ability to produce something more efficiently than any other country.
What is a comparative advantage?
An ability to produce some products more efficiently than others.
What is a national competitive advantage?
An international competitive advantage stemming from a combination of factor conditions, demand conditions, related and supporting industries, and firm strategies, structures, and rivalries
What is outsourcing?
Practice of paying suppliers and distributors to perform certain business processes or to provide needed materials or services
What is offshoring?
Practice of outsourcing to foreign countries
Who is an exporter?
A firm that distributes and sells products to one or more foreign countries
Who is an importer?
A firm that buys products in foreign markets and then imports them for resale in its home country
What is an international firm?
A firm that conducts a significant portion of its business in foreign countries
What is a multinational firm?
A firm that designs, produces and markets products in many nations
Who is an independent agent?
A foreign individual or organization that agrees to represent an exporter's interests
Wht is licensing arrangements?
Arrangements in which firms choose foreign individuals or organizations to manufacture or market their products in another country
What is a branch office?
A foreign office set up by an international or multinational firm
What is a strategic alliance?
An arrangement (also called joint venture) in which a company finds a foreign partner to contribute approximately half of the resources needed to establish and operate a new business in the partner's country
What is a foreign direct investment (FDI)?
An arrangement in which a firm buys or establishes tangible assets in another country
What is quota?
A restriction on the number of products of a certain type that can be imported into a country
What is an embargo?
A government order banning exportation and/or importation of a particular product or all products from a particular country
What is a tariff?
Tax levied on imported products
What is a subsidy?
Government payment to help a domestic business compete with foreign firms
What is protectionism?
Practice of protecting domestic business against foreign competition
What is a local content law?
A law requiring that products sold in a particular country be at least partly made there
What is a business practice law?
A law or regulation governing business practices in given countries
What is a cartel?
An association of producers whose purpose is to control supply and prices