Week 4 Slides Flashcards
Why do nations trade
Economic growth
Expands market
Efficient Production System
What are exports
Domestically produced goods/services sold in other countries
What are imports
Foreign goods/services bought by domestic customers
What factors are company’s exposed to when going global
Social/Culture practices
Economic/Political environments
Legal Restrictions
What are the international sources of factors of production
Labour
Natural resources
Capital
Entrepreneurship
What is an absolute advantage
A country that can produce the product at a lower cost than any other country
what is a comparative advantage
A nation that can supply products fast and at a lower cost compared to other countries
What is balance of trade
Difference between nations exports and imports
What is balance of payments
The overall money flowing in or out of a country
What is balance of payment surplus
More money into a country vs out
What is balance of payment deficit
More money out vs in
What is a economic infrastructure
Basic System of country’s communication, transportation, and facilties
What are the 2 types of trade restrictions
Tarrifs
Nontariff Barriers
What are tarrifs
Taxes/subcharges on foreign products
Provide income for government
What are exmaples of Nontariff barriers
Quota
Dumping
Embargo
Exchange control
What is a quota
Limit on the amount that certain products that can be imported
What is dumping
Selling products in other countries for very low price
What is embargo
A ban on importing a certain product or stop trading with a country
What is free trade area
members trade freely without tariffs or restrictions
What is counter trade
2 or more nations make a trade but payment is local products instead of cash
What is standardization
Sell the product the same way everywhere
What is adaptation
Sell the product in ways that appeal to certain consumers depending on the location of the market
