Global Business, Term 4. Flashcards
Imports
An import is a good or service bought in one country that was produced in another. A component in international trade.
Exports
Exports refers to a product or service produced in one country but sold to a buyer abroad. Exports are one of the oldest forms of economic transfer and occur on a large scale between nations.
Tariffs
A tariff is a tax imposed by one country on the goods and services imported from another country.
Subsidies
A subsidy is any financial aid ($$$) provided by a government to a producer or seller of a good or service that is designed to increase the competitiveness of a particular industry firm or entire industry.
Free Trade
Under a free trade policy, goods and services can be bought and sold across international borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange.
Transnational Corporations
Very large companies that operate in more than one country also called multinational corporations.
Outsourcing
Contracting work out to an external organisation.
Offshoring
Getting work done in a different country.
Surplus
Where a country’s exports exceed it imports or, where a country’s income exceeds its expenses.
Deficit
Where a country’s imports exceed its exports, or, where a country’s expenses exceed its income.
Specialisation
The process of an organisation / country concentrating its labour and resources on a certain type of production to be more efficient and create a comparative advantage for an economy.
Economic Growth
An increase in the size of a country’s economy over a period of time. The size of economy is measured by total production of goods and services in the economy called gross domestic product (GDP).
Comparative Advantage
Gives companies the abilities to sell goods and services at lower prices than their competitors, gaining stronger sales margins and greater profitability.
Anti-Dumping
An anti-dumping duty is a protectionist tariff that a domestic government imposes on foreign imports that it believes priced below fair market value.
Embargo
International trade restrictions adopted in response to objectionable policies.
Quotas
Government-imposed trade restriction that limits the number or monetary value of goods that a country can import or export during a particular period. Countries use quotas in international trade to help regulate the volume of trade between them and other countries.
Physical barriers to trade
Natural barriers can slow down trade between nations by making it harder and more expensive to move goods from place to place. Example: The Sahara Desert makes it extremely hard for countries in northern Africa to trade with the rest of the continent.
Free Trade Agreement
Treaties between two or more countries designed to reduce or eliminate certain barriers to trade and investment, and to facilitate stronger trade and commercial ties between participating countries.
Bilateral
An agreement or relationship between two countries.
Multilateral
An agreement or relationship between more than two countries.
World Trade Organisation
An organisation for liberalising trade, which operates a system of trade rules and provides a forum for trade negotiations between governments for settling trade disputes.
Interdependence
Shared needs of countries for the resources, goods, services, labour, and knowledge supplied by other countries.
Geographic Immobility
Barriers to the mobility of factors of production from one region to another.
Occupational Immobility
Barriers to the mobility of factors of production between different industries leading to these factors being unemployed or under-utilised.
Globalisation
The growing interdependence of the world’s economies, cultures, and populations, brought about by cross-border trade in goods and services, technology, and flows of investment, people, and information.
Protectionism
The theory or practice of shielding a country’s domestic industries from foreign competition by taxing imports.
Foreign Direct Investment
Foreign direct investment (FDI) is a category of cross-border investment in which an investor resident in one economy establishes a lasting interest in and a significant degree of influence over an enterprise resident in another economy.
Absolute advantage
The ability of a country to produce a good or service at a lower cost than another country.
