Quiz 2 Flashcards
All commercial transactions, both private and public between nations of the world.
International Business
All commercial transactions, both private and public between nations of the world.
International Business
The two-way flow of exports and imports of goods (merchandise trade) and services (service trade )
Trade
Inflows of capital from abroad for investing in domestic plant and equipment for the production of goods and or services and for buying domestics firms
Foreign Direct investment
Benefits of International Trade
- A greater amount of choice in the availability of goods and services
- Completion results in lower prices for goods and services consumed
- Increased quality of life and higher living standards
The premise that a nation could only gain from external trading if it had a trade surplus
Mercantilism
Free trade encourages countries to specialize in the production of those goods and services that they most efficiency produce
Specialization
Nations primarily export goods and services that intensely use their abundant factors of production
Factor Endowments
Endowments used to produced goods and services:
Land, labor, capital, technology
When the value of exports exceed the value of imports; the opposite of a trade deficit
Trade surplus
Customs duties on imports that are collected by a designated government agency responsible for regulating imports
Tariffs
Customs duties on imports that are collected by a designated government agency responsible for regulating imports
Tariffs
An import tax that assigns a fixed dollar amount per physical unit
Specific tariff
A tax on imports leveled as a constant percentage of the monetary value of one unit of the imported good
Ad Valorem Tariff
An important tariff established by a nation for goods of certain countries and not applied to the same goods of other countries
Preferential Duties
An important tariff established by a nation for goods of certain countries and not applied to the same goods of other countries
Preferential Duties
An agreement where a large number of developed countries permit duty – free imports of a selected list of products that originate from specific countries
Generalized System of Preferences
International Trade Organizations
- International Monetary Fund (IMF)
- World bank
-General agreement on tariffs and trade (GATT) - World Trade Organization (WTO)
-can produce two or more good and service
Comparative advantage
Has one better advantage of producing good and service example of is
Abaolute advantage
predicts the pattern of trade between countries based on the characteristics of the countries.
O-h theory
When factors are allowed to move freely among trading nations,efficiency increases, which leads to superior allocation of production of goods and services among countries.
Factor price equalization theory
