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Chapter 4 and 5
Chapter 4/5 Vocabulary World Trade/Business Ownership
| Term | Definition |
|---|---|
| Balance of payments | he relationship between the flow of money into and out of a country. |
| embargo | A complete ban on importing certain products |
| tariff | is a tax or surcharge on imports |
| Exporting | selling domestically produced products abroad |
| Exchange rate | based on the rate at which its currency is valued against other currencies. |
| Balance of trade | the relationship between a country’s exports and imports |
| devaluation. | The reduction in value of a country’s currency |
| quota | limits the number of products in certain categories that can be imported |
| importing | Buying foreign goods and raw materials |
| Governments that control access to foreign currency exchange in accordance with national policy | exchange control |
| North American Free Trade Agreement (NAFTA | the accord that removes trade barriers among Canada, Mexico, and the United States. |
| franchise | contractual agreement in which a wholesaler or retailer gains the right to sell another company’s products under that firm’s brand name in compliance with that firm’s operating requirements, common with fast-food firms. |
| Subcontracting | when a firm hires a local company to produce, distribute, or sell a good or service in a foreign market. |
| foreign licensing agreement | A contractual agreement in which one firm allows another to produce or sell its product or use its trademark, patent, or manufacturing processes in a specific geographic area in exchange for royalties |
| General Agreement on Trade and Tariffs (GATT) | an international trade accord to reduce tariffs and standardize trading rules worldwide. |
| World Bank | makes long-term loans for economic development projects |
| countertrade. | International bartering agreements used to facilitate trade |
| European Union (EU). | The federation of European countries that seeks to protect and promote trade among them |
| World Trade Organization (WTO) | the institution that succeeded GATT in monitoring and enforcing trade agreements |
| joint venture | cooperative agreement that allows a company to share risks, costs, profits, and management responsibilities with one or more partners in the host country. |
| infrastructure. | A country’s basic system of communication, transportation, energy and other utility resources is collectively |
| Franchisors | companies that sell franchises to independent business people |
| limited liability company (LLC) | firm is governed under an operating agreement resembling a partnership, except that each partner’s liability for the actions of the other owners is limited. |
| acquisition | occurs when one company buys the assets and assumes the liabilities of another firm. |
| Microloans | small-business loans often used to buy equipment or operate a business |
| franchisee | The purchaser of a franchise |
| Employee ownership | type of business ownership in which workers buy shares of stock in the company that employs them. |
| Common stock | shares that give the owners voting rights but only residual claims on the firm’s assets and income distribution. |
| home-based business | operated from the residence of the business owner, is a widely used and low cost option for new firms. |
| Small Business Administration (SBA) | the principal federal government agency that aids, counsels, and assists small businesses. |
| conglomerate merger | merger between firms whose businesses are unrelated |
| horizontal merger | one firm combines with another firm in the same industry |
| corporation | legal organization whose assets and liabilities are separate from those of its owner(s). |
| sole proprietorship. | A business that is owned by one person |
| Small business | generally defined as any firm that is independently owned and operated, that is not dominant in its market, and that meets a variety of size standards for income and number of employees. |
| Preferred stock | shares that give the owners limited voting rights, and the right to receive dividends or assets before the owners of common stock. |
| board of directors. | The governing authority of a corporation, elected by the common stockholders |
| S corporations | can elect to be taxed as partnership while maintaining the advantages of corporations. |
| partnership | Two or more persons who operate a business as co-owners |
| Venture capital | money invested in a business by another business firm or group of individuals in exchange for an ownership share. |
| business plan | a written document that provides an orderly statement of a company’s goals, the methods by which it intends to achieve those goals, and the standards by which it will measure achievements. |
| stockholders. | Owners of a corporation due to their purchase of stock in the corporation |
| Franchising | a contractual business agreement between a manufacturer or supplier and a dealer. |
| merger | When two or more firms combine to make one company |
| a vertical merger | When firms at different levels in the production and/or marketing process decide to combine into one company |
| business incubator | an organization that provides low-cost common facilities and services to small, start-up businesses. |
| joint venture. | A partnership between companies formed for a specific undertaking |
| not-for-profit corporation. | An organization whose goals do not include pursuing a profit |
Created by:
tiffanie1719
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