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Intro to Business 2
Module 2
| Term | Definition |
|---|---|
| Absolute Advantage | The advantage that exists when a country has a monopoly on producing a specific product or can produce it more efficiently than all other countries |
| Balance of Payments | The difference between money coming into a country (from exports) and money leaving the country (for imports) plus money flows from other factors such as tourism, foreign aid, military expenditures, and foreign investment. |
| Balance of trade | Is the total value of a nation's exports compared to its imports over a particular period. |
| Common Market | A regional group of countries that have a common external tariff, no internal tariffs, and a coordination of laws to facilitate exchange; also called a trading bloc. An example is the European Union. |
| Comparative Advantage Theory | Theory states that a country should sell to other countries those products that it produces most effectively and efficiently and buy from other countries those products that it cannot produce as effectively or efficientl |
| Devaluation | Lowering the value of a nation's currency relative to other currencies. |
| Dumping | Selling products in a foreign country at lower prices than those charged in the producing country. |
| Embargo | A complete ban on the import or export of a certain product, or the stopping of all trade with a particular country. |
| Exchange Rate | The value of one nation's currency relative to the currencies of other countries. |
| Exporting | Selling products to another country. |
| Foreign Subsidiary | A company owned in a foreign country by another company, called the parent company. |
| Free Trade | The movement of goods and services among nations without political or economic barriers. |
| GATT General Agreement on Tariffs and Trade | A 1948 agreement that established an international forum for negotiating mutual reductions in trade restrictions. |
| Import quota | Limit on the number of products in certain categories that a nation can import. |
| Importing | Buying products from another country. |
| Joint Venture | Partnership in which two or more companies (often from different countries) join to undertake a major project. |
| NAFTA North American Free Trade Agreement | An agreement that created a free-trade area among the United States, Canada, and Mexico |
| Outsourcing | Contracting with other companies (often in other countries) to do some or all the functions of a firm, like its production or accounting tasks. |
| SWF's Sovereign Wealth Funds | Investment funds that are controlled by governments holding large stakes in foreign companies, real estate, and other investments. |
| Strategic Alliance | A cooperative arrangement between two or more independent organization to achieve shared business goals while keeping their separate identities and legal autonomy. |
| Tariffs | Tax imposed on imports. |
| Trade Deficit | An unfavorable balance of trade occurs when the value of a country's imports exceeds that of it exports. |
| Trade Protectionism | The use of government regulations to limit the import of goods and services. |
| Trade Surplus | A favorable balance of trade; occurs when the value of a country's exports exceeds that of its imports. |
| WTO World Trade Organization | International organization that replaced the General Agreement on tariffs and trade was assigned the duty to mediate trade disputes among nations. |
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