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Business Ess. Chpt 4
| Term | Definition |
|---|---|
| globalization | process by which the world economy is being a single interdependent system |
| import | product made or grown abroad but sold domestically |
| export | product made or grown domestically, but ship and sold abroad |
| North American Free Trade Agreement (NAFTA) | agreement to gradually eliminate tariffs and other trade barriers among the U.S., Canada, and Mexico |
| European Union (EU) | agreement among European nations to eliminate or make uniform most trade barriers affecting group members |
| Association of Southeast Asian Nations (ASEAN) | organization for economic, political, social, and cultural cooperation among southeast Asian Nations |
| General Agreement on Tariffs and Trade (GATT) | international trade agreement to encourage the multilateral reduction or elimination of trade barriers |
| World Trade Organization (WTO) | organization through which member nations negotiate trading agreements and resolve disputes about trade policies and practices |
| balance of trade | economic value of all products a country exports minus the economic value of all products it imports |
| trade deficit | situation in which a country's imports, exceeds its exports, creating a negative balance of trade |
| trade surplus | situation in which a country's exports, exceeds its imports, creating a positive balance of trade |
| balance of payments | flow of all money into or out of a country |
| exchange rate | rate at which the currency of one nation can be exchanged for the currency of another nation |
| euro | a common currency shared among most of the members of the European Union (excluding Denmark, Sweden, and United Kingdom) |
| absolute advantage | the ability to produce something more efficiently than any other country can |
| comparative advantage | the ability to produce some products more efficiently than others |
| national competitive advantage | international competitive advantage stemming from a combination of factor conditions, demand conditions, related and supporting industries, and firm strategies, structures, and rivalries |
| outsourcing | the practice of paying suppliers and distributors to perform certain business processes or to provide needed materials or services |
| offshoring | the practice of outsourcing to foreign countries |
| exporter | firm that distributes and sells products to one or more foreign countries |
| importer | firm that buys products in foreign markets and then imports them for resale in its own country |
| international firm | firm that conducts a significant portion of its business in foreign countries |
| multinational firm | firm that designs, produces, and markets products in many nations |
| independent agent | foreign individual or organizations than agrees to represent an exporter's interest |
| licensing arrangement | arrangement in which firms choose foreign individuals or organizations to manufacture or market their products in another country |
| branch office | foreign office set up by an international or multinational firm |
| strategic alliance | arrangement (also called joint venture) in which a company finds a foreign partner to contribute approximately half of the resources needed to establish and operate a new business in the partner's country |
| foreign direct investment (FDI) | arrangement in which a firm buys or establishes tangible assets in another country |
| quota | restriction of the number of products of a certain type that can be imported into a country |
| embargo | government order banning exportation and/or importation of a particular product or all products from a particular country |
| tariff | tax levied on imported products |
| subsidy | government payment to help a domestic business compete with foreign firms |
| protectionism | practice of protecting domestic business against foreign competition |
| local content law | law requiring that products sold in a particular country be at least partly made there |
| business practice law | law or regulation governing business practices in given countries |
| cartel | association of producers whose purpose is to control supply and prices |
| dumping | practice of selling a product abroad for less than the cost of production |
Created by:
shelaynecarter
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