the ability to produce a specific product more efficiently than any other nation
absolute advantage
the total flow of money into a country minus the total flow of money out of that country over some period of time
balance of payments
the total value of a nation’s exports minus the total value of its imports over some period of time
balance of trade
document issued by a transport carrier to an exporter to prove that merchandise has been shipped
bill of lading
the ability to produce a specific product more efficiently than any other product
comparative advantage
an international barter transaction
countertrade
the reduction of the value of a nation’s currency relative to the currencies of other countries
currency devaluation
issued by the exporter’s bank, ordering the importer’s bank to pay for the merchandise, thus guaranteeing payment once accepted by the importer’s bank
draft
exportation of large quantities of a product at a price lower than that of the same product in the home market
dumping
an organization of nations formed to promote the free movement of resources and products among its members and to create common economic policies
economic community
a complete halt to trading with a particular nation or in a particular product
embargo
an independent agency of the U.S. government whose function is to assist in financing the exports of American firms
Export–Import Bank of the United States
selling and shipping raw materials or products to other nations
exporting
a restriction on the amount of a particular foreign currency that can be purchased or sold
foreign–exchange control
an international organization of 153 nations dedicated to reducing or eliminating tariffs and other barriers to world trade
General Agreement on Tariffs and Trade (GATT)
a tax levied on a particular foreign product entering a country
import duty (tariff)
a limit on the amount of a particular good that may be imported into a country during a given period of time
import quota
purchasing raw materials or products in other nations and bringing them into one’s own country
importing
all business activities that involve exchanges across national boundaries
international business
an international bank with 186 member nations that makes short–term loans to developing countries experiencing balance–of payment deficits
International Monetary Fund (IMF)
issued by a bank on request of an importer stating that the bank will pay an amount of money to a stated beneficiary
letter of credit
a contractual agreement in which one firm permits another to produce and market its product and use its brand name in return for a royalty or other compensation
licensing
an internationally supported bank that provides loans to developing countries to help them grow
multilateral development bank (MDB)
a firm that operates on a worldwide scale without ties to any specific nation or region
multinational enterprise
a nontax measure imposed by a government to favor domestic over foreign suppliers
nontariff barrier
a partnership formed to create competitive advantage on a worldwide basis
strategic alliance
a negative balance of trade
trade deficit
provides a link between buyers and sellers in different countries
trading company
powerful successor to GATT that incorporates trade in goods, services, and ideas