Chapter 1 & 2

Question 1

Balance of Payments

Answer 1

The system of accounts that records a nation’s international financial transactions

Question 2

Current Account

Answer 2

The portion of a balance-of-payments statement that shows a record of all merchandise

(exports, imports, and services, plus unilateral transfer of funds)

Question 3

GATT

Answer 3

stands for General Agreement on Tarriffs and Trade was a trade agreement signed by the United States and 22 other countries shortly after WWII to negotiate tariffs and other matters regarding trade

Question 4

International Monetary Fund (IMF)

Answer 4

A global institution helping nations stay economically viable. It helps with stability in the financial markets and used in the United Nations.

Question 5

Nontariff barriers

Answer 5

Restrictions, other than tariffs, placed by countries on imported products

(they may include quality standards, sanitary and health standards, quotas, embargoes, boycotts, and antidumping penalties)

Question 6

Protectionism

Answer 6

The use by nations of legal, exchange, and psychological barriers to restrain entry of goods from other countries

Question 7

Tariff

Answer 7

A fee or tax that countries impose on imported goods, often to protect a country’s markets from intrusion from foreign countries

Question 8

Voluntary Export Restraints (VERs)

Answer 8

Agreements, similar to quotas, between an importing country and an exporting country for a restriction on the volume of exports. Also known as orderly market agreements (OMAs).

Question 9

World Trade Organization (WTO)

Answer 9

The organization formed in 1994 that encompasses the GATT structure and extends it to new areas that had not been covered previously. The WTO adjusts trade disputes. All member countries have equal representation.

Question 10

National Trade Data Bank (NTDB)

Answer 10

created to improve access to data & trade

Question 11

Controllable elements

Answer 11

The aspects of trade over which a company has control and influence;

Include marketing decisions covering
- product
- price
- promotion
- distribution
- research
- advertising

Question 12

Domestic environment uncontrollables

Answer 12

Factors in a company’s home country over which the company has little to no control or influence.

Thay include
- political
- legal
- economic climate
- technology
- competitive forces
- economic forces

Question 13

Foreign environment uncontrollables

Answer 13

Factors in the foreign market over which a business operating in its home country has little or no influence.

They include
- legal
- economic climate
- geography
- infrastructure
- structure of distribution
- technology

Question 14

Global Awareness

Answer 14

A frame of reference, important for the success of a businessperson, that embodies tolerance of cultural differences and knowledge of cultures, history, world markets, and global socio-economic and political trends

Question 15

International marketing

Answer 15

The performance of business activities designed to plan, price, promote, and direct the flow of a company’s goods and services to make profit

Question 16

Self-reference criterion (SRC)

Answer 16

An unconscious reference to one’s own cultural values, experience, and knowledge as a basis for a decision

Question 17

Uncontrollable elements

Answer 17

Factors in the business environment over which the international marketer has no control or influence

Can include:
- legal restraints
- government controls
- weather
- consumer behavior
- political events