Chapter 3

Question 1

An international trade alliance that promotes open trade and economic and technical cooperation among member nations.

Answer 1

Asia-pacific economic cooperation

Question 2

A trade alliance that promotes trade and economic integration among member nations in Southeast Asia.

Answer 2

Association of Southeast Asian nations

Question 3

Difference between the flow of money into and out of the country.

Answer 3

Balance of payments

Question 4

Difference in vie between a nations exports and imports.

Answer 4

Balance of trade

Question 5

A group of firms or nations that after to act as a monopoly and not compete with eachother to generate a competitive advantage in world markets

Answer 5

Cartel

Question 6

The basis of most international trade, when a country specializes in products that it can supply more efficiently or at a lower cost than it can produce other items.

Answer 6

Comparative advantage

Question 7

The hiring of a foreign company to produce a specified volume of the initiating company’s product to specification; the final product carries the domestic firms name.

Answer 7

Contract manufacturing

Question 8

Foreign trade agreements that involve bartering products for other products instead of for currency.

Answer 8

Countertrade agreements

Question 9

The ownership of overseas facilities.

Answer 9

Direct investment

Question 10

The act of a country or business selling products at less than what it costs to produce them.

Answer 10

Dumping

Question 11

A monopoly that exists when a country is the only source of an item, the only producer of an item or the most efficient producer of an item.

Answer 11

Absolute advantage