Chapter 3 Flashcards
Economic globalization
The increasing integration and interdependence of national economies around the world
Economies of scale
Savings from buying parts and materials, manufacturing, or marketing in large quantities
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
Trade surplus
A favorable trade balance created when a country exports more than it imports
Trade deficit
An unfavorable trade balance created when a country imports more than it exports
Balance of payments
The sum of all payments one nation receives from other nations minus the sum of all payments it makes to other nations, over some specific period of time
Exchange rate
The rate at which the money of one country is traded for the money of another
Free trade
International trade unencumbered by restrictive measures
Protectionism
Government policies aimed at shielding a country’s industries from foreign competition
Tariffs
Taxes levied on imports
Import quotas
Limits placed on the quantity of imports a nation will allow for a specific product
Embargo
A total ban on trade with a particular nation (a sanction) or of a particular product
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
Dumping
Charging less than the actual cost or less than the home-country price for goods sold in other countries
Trading blocs
Organizations of nations that remove barriers to trade among their members and that establish uniform barriers to trade with nonmember nations
Culture
A shared system of symbols, beliefs, attitudes, values, expectations and norms for behavior
Ethnocentrism
Judging all other groups according to the standards, behaviors and customs of one’s own group
Stereotyping
Assigning a wide range of generalized and often false attributes to an individual based on membership an a particular culture or social group
Cultural pluralism
The practice of accepting multiple cultures on their own terms
Tax haven
A country whose favorable banking laws and low tax rates give individuals and companies the opportunity to shield some of their income from higher tax rates in their home countries or other countries where they do business
Importing
Purchasing goods or services from another country and bringing them into one’s own economy
Exporting
Selling and shipping goods and services to another country
Licensing
Agreement to produce and market another company’s product in exchange for a royalty of fee
Foreign direct investment (FDI)
Investment of money by foreign companies in domestic business enterprises
