IB Flashcards
Mercantilism
positive balance of trade (= more export than import)
benefits:
-enables to accumulate reserves
-accumulation of finished goods increases wealth
absolut advanatage
nations benefit from free trade
-nations should specialize
-export what your good at and import what you are not good at
-lower costs and waste, raises efficiency and consumption
Free Trade
absence of restrictions regarding the internal flow of goods and services
-imported products tend to be cheaper
- financially smart as it is a reduction of firms´and customers´cost
-trade advantage
transaction costs
expenses accuring when selling or buying a good or a service
=firm external costs or caused by an institution
large scale production
mass production, producing a high quantity of a product
Opportunities abroad depend on
-industry
-consumer type
-channel structure
first mover advantage
advantage of the initial occupant of a market segment
neo-classic economics
- hyper-rational customer
- composition of goods and services is analyzed
- analyzed by looking at marginal rate efficiency
- maximize profit and minimize cost
Transaction Economics
- rational but rationality has boundaries
- transactions are analyzed
- analyzed by looking at decision-making quality
- no optimal solution, just realizing what adjustments you need to make
Types of Players in IB
focal firm, distributor. facilitator, government
How should goals be set?
S Specific
M Measurable
A Achievable
R Relevant
T Time-Specific
E Extendable
R Recorded
always qualitative and quantitative
trade surplus
export exceeds import
called “positive” balance of trade
trade deficit
import exceeds export
called “negative” balance of trade
devaluation
government action to reduce the official value of its currency
balance of payment
represents the difference between all inflow and outflow of money
balance sheet of trade, investment and transfer of payments
annual account og economic transactions of a nation with all others
=Zahlungsbillanz
