FBP C3 - Importing and Exporting Flashcards

1
Q

Why should nations trade with other nations?

A
  1. No country is self sufficient
  2. Other countries need products that prosperous countries produce
  3. Natural resources and technological skills are not distributed evenly around the world
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2
Q

competitive advantage

A

That a country should make then sell those products it produces most efficiently but buy those it cannot produce efficiently

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3
Q

absolute advantage

A

It exists if a country produces a specific product more efficiently than any other country.

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4
Q

What products can be imported and exported?

A

Literally any product can be imported / exported

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5
Q

Exporting

A

selling products to other countries

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6
Q

Importing

A

buying products from other countries

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7
Q

Dumping

A

selling products for less in a foreign country than in your own country.

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8
Q

Favorable balance of trade / trade surplus

A

occurs when exports exceeds imports

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9
Q

Balance of payments

A

is the balance of trade plus other money flows such as tourism and foreign aid.

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10
Q

Balance of trade

A

is the relationship of exports to imports

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11
Q

What are some ways in which a company can engage in global business?

A
  • Licensing
  • Exporting
  • Franchising
  • Contract manufacturing
  • Joint ventures
  • Strategic alliances
  • Direct foreign investment
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12
Q

How do multinational corporations differ from companies that participate in global business?

A

Unlike companies that only export or import, multinational corporations also have manufacturing facilities or other physical, presence in global markets

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13
Q

Licensing

A

a firm (the licensor) may decide to compete in a global market by licensing the right to manufacture its products or use its trademark to a foreign company ( the licensee) for a fee (royalty)

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14
Q

Franchising

A

contractual agreement whereby someone with a good idea for a business sells others the right to use the business name and sell a product or service in a given territory in a specific manner

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15
Q

Contract manufacturing

A

a foreign company produces private labels goods to which a domestic company then attaches its own brand name or trademark

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16
Q

Joint venture

A

is a partnership in which two or more companies ( often from different countries) join to undertake a major project.

17
Q

Foreign direct investment

A

is the buying of permanent property and business in foreign nations

18
Q

Foreign subsidiary

A

the most common form of FDI. A company is owned in a foreign company country by another company, called a parent company.

19
Q

What are some forces that can discourage participation in global business?

A
  • Sociocultural forces
  • Economic forces
  • Financial forces
  • Legal and regulatory forces
  • Physical and environmental forces
20
Q

Exchange rate

A

is the value of one nations currency relative to the currencies of other countries.

21
Q

Countertrading

A

is a complex form of bartering in which several countries each trade goods or services for other goods or services.

22
Q

Trade protectionism

A

is the use of government regulations to limit the import of goods and services. Advocates believe it allows producers to grow, producing more jobs. The key tools of protectionism are tariffs, import, quotas and embargoes.

23
Q

Tariffs

A

taxes on foreign products. Protective tariffs raise the price of froing products and protect domestic industries: revenue tariffs raise money for the government

24
Q

Embargo

A

prohibits the importing or exporting of certain products to a particular country

25
Import quota
limits the number of products in certain categories a nation can import
26
Is trade protectionism good for domestic producers?
Debatable. Trade protectionisms offer pluses and minuses.
27
Why do governments continue such practices?
The theory of mercantilism started the practice of trade protectionism, and it has persisted through in a weaker form ever since.
28
World trade organization
meditate trade disputes among nations
29
Common market / trading bloc
a regional group of countries with a common external tariff, no internal tarrif.
30
Outsourcing
the purchase of goods and services from outside a firm rather than providing them from inside the company.
31
Why is outsourcing a major concern for the future?
People fear jobs in the US will be lost due to increased outsourcing and the quality of products will decrease.
32
Free trade
is the movement of goods and services among nations without political or economic barriers.
33
The guiding principal of free economic change is
comparative advantage theory
34
Job seekers intrested ingworking in global trade should consider applying to
small businesses | large businesses
35
A foreign countrys production of private label goods to which a domestic company then attaches its brand name or trade mark is called
contract manufactering
36
Us business people are often accused of ethnocentricity is the belief that
your own culture is superior to other cultures
37
ethnocentricity
your own culture is superior to other cultures
38
Threats to global trade include
terrorism rouge states Income inequity
39
Strategies to reach global markets from least to most amount of commitment, control, risk and profit potential
Least 1. Licensing 2. Exporting 3. Franchising 4. Contract Manufactering 5. Joint ventures and strategic alliences 6. Forign direct investment