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Chapter 4:Globalizan

Globalization The increasing connectivity and interdependence of the world's economies, societies, and cultures because of advances in communication, technology, trade, international investment, movement of currency, and migration.
E-Commerce electronic commerce, the buying and selling of products and services through computer networks.
Free Trade the movement of goods and services among nations without political or economic restrictions.
Global Economy the increasing interaction of the world’s economies with one another as a single market instead of in many national markets.
Multinational Corporations organizations with multinational management and ownership that manufacture and market products in many different countries.
Importing when a company buys goods outside the country and resells them domestically.
Exporting when a company produces goods domestically and sells them outside the country.
Self- Sufficient when a country is able to produce by itself all of the products and services it needs or that its people want.
Absolute Advantage exists when one country has a monopoly on producing a product more cheaply or efficiently than any other country can.
Comparative Advantage meaning a country sells to other countries those products and services it produces most cheaply or efficiently and buys from other countries those it does not produce most cheaply or efficiently.
Balance of Trade the value of a country’s exports compared to the value of its imports as measured over a particular period of time.
Trade Surplus favorable balance of trade, exists when the value of a country’s total exports exceeds the value of its total imports.
Trade Deficit unfavorable balance of trade, exists when the value of a country’s total imports exceeds the value of its total exports.
Balance of Payments Surplus favorable balance of payments, exists when more money flows into a country than flows out.
Balance of Payments Deficit unfavorable balance of payments exists when more money flows out of a country than flows in.
Countertrading bartering goods for goods (or services)
Export Assistance Centers support for small businesses
Export Management Companies help in establishing trading relationships
Franchising A company allows a foreign company to pay it a fee and share of the profits in return for using the first company’s brand name and a package of materials and services
Foreign Licensing A company gives a foreign company permission, in return for a fee, to make or distribute the first company’s product or service
Outsourcing contract manufacturing, is defined as using suppliers outside the company to provide goods and services.
Global Outsourcing offshoring, is defined as using suppliers outside the U.S. to provide labor, goods, or services.
Joint Venture also known as a strategic alliance, with a foreign company to share the risks and rewards of starting a new enterprise together in a foreign county.
Foreign subsidiary a company in a foreign country that is totally owned and controlled by the parent company.
Culture the shared set of beliefs, values, knowledge, and patterns of behavior common to a group of people
Culture Shock the feeling of discomfort and disorientation associated with being in an unfamiliar culture
Nonverbal Communication consists of messages sent outside of the written or spoken word.
Infrastructure the physical facilities that form the basis for its level of economic development.
Developed Contries first-world countries, those with a high level of economic development and generally high average level of income among their citizens
Less Developed Contries developing countries, are third-world countries, those nations with low economic development and low average incomes
Currency Exchange Rate the rate at which one country’s currency can be exchanged for the currencies of other countries
Floating Exchange Rate System the values of all currencies are determined by supply and demand
Devaluation when a nation’s currency is lowered relative to other countries’ currencies
Democratic Political System rely on free elections and representative assemblies
Totalitarian Political System ruled by a dictator, a single political party, or a special-membership group
Foreign Corrupt Practices Act makes it illegal for employees of U.S. companies to make “questionable” or “dubious” contributions to political decision makers in foreign nations.
Trade Protectism the use of government regulations, tariffs, quotas, and embargoes to limit the import of goods and services.
Tariff a trade barrier in the form of a customs duty, or tax, levied mainly on imports.
Import Quota a trade barrier in the form of a limit on the quantity of a product that can be imported.
Dumping the practice of a foreign company’s selling its products abroad for less—even less than the cost of manufacture—than the price of the domestic product in than market.
Embargo a complete ban on the import or export of certain products.
World Trading Organization (WTO) consisting of 153 member countries, is designed to monitor and enforce trade agreements.
General Agreement on Tariffs and Trade (GATT) an international accord firstsigned by 23 nations in 1947, which helped to reduce worldwide tariffs and other barriers.
World Bank Purpose is to provide low-interest loans to developing nations for improving health, education, transportation, and telecommunications.
International Monetary Fund (IMF) designed to assist in smoothing the flow of money between nations.
Common Market also known as an economic community or a trading bloc, is a group of nations within a geographical region that have agreed to remove trade barriers with each other.
North American Free Trade Agreement (NAFTA) a common market consisting of the 435 million people of the United States, Canada, and Mexico.
European Union (EU) The world's largest free market; was formed in 1957 and presently consists of 27 trading partners in Europe.
Mercosur the largest common market in Latin American and has four core members—Argentina, Brazil, Paraguay, and Uruguay, with Venezuela scheduled to become a full member—and five associate members, Bolivia, Chile, Colombia, Ecuador, and Peru.
Asia- Pacific Economic Cooperation (APEC) a common market of 21 Pacific Rim countries whose purpose is to improve economic and political ties.
Created by: chulamaria



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