Global Business Flashcards
What is free trade?
A proven strategy for building global prosperity and adding to the momentum of political freedom
International business
All business activities that involve exchanges across national boundaries
Absolute advantage
The ability to produce a specific product more efficiently than any other nation
Comparative advantage
The ability to produce a specific product more efficiently than any other product
Exporting?
The selling and shipping of raw materials or products to other nation
Importing
Purchasing raw materials or products in other nations and bringing them into one’s own country
What are the principle activities in international trade
Importing and exporting
What is the balance of trade
The total value of a nation’s exports minus the total value of its imports over some period of time
What a tree deficit
I’m negative balance of trade
What is a favorable balance of trade
When a country exports more than it imports
What is the nations balance of payments?
The total flow of money into a country minus the total flow of money out of the country over some period of time
What is import duty called or a tarrif?
Attacks levied on a particular foreign product entering the country
What are revenue tariffs
Imposed solely to generate income for the government
What are protective tariffs
Are imposed to protect a domestic industry from competitions by keeping the price of competing import level with or higher than the price of similar domestic products
What is dumping
The exportation of large quantities of a product at a price lower than that of the same product in the home market
What are nontariff barriers
A non tax measure imposed by the government to favor domestic over foreign suppliers
What is the import quota
A limit on the amount of a particular good that may be imported into a country during a given period of time
What is an embargo
A complete halt to trading with a particular nation or in a particular product
What is a foreign exchange
A restriction on the amount of a particular foreign currency that can be purchased or sold
What is a currency devaluation
The reduction of the value of the nations currency relative to the currencies of other country
What are reasons for trade restrictions?
To equalize the nations balance of payments
To protect new or week industries
To protect national security
To protect the health of citizens
To retaliate for another nations trade restrictions
To protect domestic jobs
Reasons against trade restrictions
Higher prices for consumers
Restrictions of consumers choices
Miss allocation of international resources
Loss of jobs
Who is our leading export partner?
Canada and Western Europe
Who is our second largest export customer
Mexico and Latin America
