Test 3 Flashcards
Pattern of imports and exports that occurs in the absence of trade barriers
Free Trade
financial assistance to domestic producers in the form of cash payout, low interest loans, tax breaks, product price support, or other forms
Subsidies
Designated geographic region through which merchandise is allowed to pass with lower customs duties and or fewer customs procedures
Foreign Trade Barriers
Government tax levied on a product as it enters or leaves a country
Tariff
Tariff levied as a percentage of the stated price of an imported product
Ad valorem Tariff
Tariff levied as a specific fee for each unit (measured by number, weight) of an imported product
Specific tariff
Tariff levied on an imported product and calculated partly as a percentage of its stated price and partly as a specific fee for each unit
Compound tariff
a limited or fixed number or amount of people or things, in particular.
Quota
Unique version of export quota that a nation imposes on its exports usually at the request of an importing nation
Voluntary Export Restraint
Lower tariff rate for a certain quantity of imports and a higher rate for quantities that exceed the quota
Tariff Quota
Complete ban on trade in one or more products with a particular country
Embargo
Restrictions on the convertibility of a currency into other currencies
Currency controls
Exporting of a product at a price either lower than the price that the product normally commands in its domestic market or lower than the cost of production
Dumping
Additional tariff placed on an imported product that a nation believes is being dumped on its market
Anti dumping duty
International organization that enforces the rules of international trade
World Trade Organization
Purchase of physical assets or a significant amount of the ownership of a company in another country to gain a measure of management control
Foreign direct investment
Investment that does not involve obtaining a degree of control in a company
Portfolio investment
Theory stating that a company begins by exporting its product and then later undertakes foreign direct investment as the product moves through its life cycle
International product life cycle
Theory stating that when an imperfection in the market makes a transaction less efficient than it could be, a company will undertake foreign direct investment to internalize the transaction and thereby remove the imperfection
Market imperfections
Theory stating that firms undertake foreign direct investment when the features of a particular location combine with ownership and internationalize advantages to make a location appealing for investment
Eclectic theory
Theory stating that a firm tries to establish a dominant market presence in an industry by undertaking foreign direct investment
Market Power
National accounting system that records all receipts coming into the nation and all payments to entities in other countries
Balance of payments
When a country exports more goods and services and receives more income from abroad than its imports and pays abroad
Current Surplus Account
National account that records transactions involving the purchase and sale of assets
Capital Account
