chapter 3: international business Flashcards
international business
global marketing
why trade?
absolute advantage
(monopoly, monopolistic)
comparative advantage
outsourcing
insourcing
exporting
importing
balance of trade
the difference in a countries imports and exports
trade deficit
when a country imports more than they export
(buy more than they sell)
trade surplus
when a country exports more that they import
(sell more than they buy)
balance of payment
the difference between the money going into and out of a country
ie. the summation of a countries spendings and earning
made up of: military spending, international aid and investments, tourism, loans, BALANCE OF TRADE
international trade barriers
barriers to international trade
economics, legalities, politics, technological background
social and cultural (ethical)
economic development
industrial nation
LDC (least-developed country)
LDC (least developed country)
characterized by low- per capita income (income from export of goods and services over population size)
citizens are less-likely to buy non-essentials
less infrastructure and technological development
when trading, need to consider basic distribution and communication and lack of technology
infrastructure
exchange rates
fiscal policy
government involvement in influencing the economy (through taxes and spending)
devaluation
the purposeful lowering of the value of a countries currency
done through fiscal policy
ethical, legal and political barriers
companies need to consider:
domestic laws (ie. laws of US)
international laws
host country laws (laws of the country the company is looking to do business in)
also look at: political climates, trade restrictions and different ethical values
laws and regulations
