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Chapter 7
| Term | Definition |
|---|---|
| Balance of trade | Difference in value between exports and imports of a nation |
| imports | goods and services purchased from other countries |
| exports | goods and services sold to other countries |
| absolute advantage | advantage a nation has when it possesses natural resources or capabilities that allow it to produce a given commodity at a lower cost than any other nation in the world |
| comparative advantage | advantage a nation gains by selling the goods it produces more efficiently than other goods |
| multi-nationals | large corporations that have operations in several countries |
| mini-nationals | midsized and smaller companies that have operations in foreign countries |
| tariff | a tax on imports; also called a duty |
| quota | limit on either the quantity or monetary value of a product that may be imported |
| embargo | total ban on specific goods coming into and leaving a country |
| joint ventures | partnerships between foreign and domestic firms, frequently used or required to conduct business abroad |
| custom brokers | import specialists licensed by the U.S. Treasury Department |
| letter of credit | guarantee of payment obtained by foreign customer that allows a U.S. exporter to be paid by a U.S. bank as soon as goods have been shipped |
| draft | exporter's authorization to a foreign bank to collect money owed for a shipment and release shipping documents to a foreign customer once payment is made |
| time draft | document that allows a foreign customer to take delivery of goods without payment; essentials a promise to pay in the future |
| nationalize | to take ownership by government action and without compensation |
| most-favored-nation status (MFNS) | status the United States grants to countries with which it wants to encourage trade |
| foreign trade zones | designated areas of a country where foreign businesses benefit from reduced tariffs |
| Export-Import Bank (Eximbank) | Independent agency of the U.S. government whose purpose is to foster trade between the United States and others countries |
| international monetary fund (IMF) | Multinational agency whose purpose is to help stabilize exchange rates among the currencies of its member nations |
| general agreement on tariffs and trade (GATT) | International trade agreement designed to promote global free trade through the reduction of tariffs and the use of a common set of rules for trading |
| North American Free Trade Agreement (NAFTA) | international trade among the United States, Canada and Mexico |
| European Union (EA) | Europe's trading bloc; intended as a political as well as economic union |
Created by:
olongboat18
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