BUS 110-40 Chapter 3 - Exploring Global Business
International Monetary Fund (IMF)
an international bank of 188 member nations that makes short-term loans to developing counties experiencing balance-of-payment deficits
Countertrade
an international barter transaction
General Agreement on Tariffs and Trade (GATT)
an international organization of 160 nations dedicated to reducing or eliminating tariffs and other barriers to world trade.
Multilateral Development Bank (MDB)
an internationally supported bank that provides loans to developing countries to help them grow
Currency Devaluation
the reduction of the value of a nation's currency relative to the currencies of other countries
Balance of Trade
the total value of a nation's exports minus the total value of its imports over some period of time.
Define importing.
Purchasing raw materials or products in other nations and bringing them into one's own country.
Define exporting.
Selling and shipping raw materials or products to other nations.
Discuss the WTO.
World Trade Organization is a powerful successor to GATT that incorporates trade in goods services, and ideas.
International Business
all business activities that involve exchanges across national boundaries
Export-Import Bank of the United States
an independent agency of the U.S. government whose function is to assist in financing the export of American firms.
Define embargo.
A complete halt to trading with a particular nation or in a particular product.
Define multinational enterprise.
A firm that operates on a worldwide scale without ties to any specific nation or region.
Define trade deficit.
A negative balance of trade.
Define nontariff barrier.
A nontax measure imposed by a government to favor domestic over foreign suppliers.
Define joint venture.
A partnership formed to achieve a specific goal or to operate for a specific period of time.
Define tariff.
A tax levied on a particular foreign product entering a country, also known as import duty.
Define economic community.
An organization of nations formed to promote the free movement of resources and products among its members and to create common economic policies.
Define letter of credit.
Issued by a bank of request of an importer stating that the bank will pay an amount of money to a stated beneficiary.
Define dumping.
Exportation of large quantities of a product at a price lower than that of the same product in the home market.
Discuss GATT and when it was created.
General Agreement on Tariffs and Trade (GATT) is an international organization of 160 nations dedicated to reducing or eliminating tariffs and other barriers to world trade. It was created at the end of WWII.
Define comparative advantage.
The ability to produce a specific product more efficiently than any other product.
Define balance of payments.
The total flow of money into a country minus the total flow of money out of that country over some period of time.
Licensing
a contractual agreement in which one firm permits another to produce and market its product and use its brand name in return for a royalty or other compensation.
Import Quota
a limit on the amount of a particular good that ay be imported into a country during a given period of time
Strategic Alliance
a partnership formed to create competitive advantage on a worldwide basis
Foreign-Exchange Control
a restriction on the amount of a particular foreign currency that can be purchased or sold
Bill of Lading
document issued by a transport carrier to an exporter to prove that merchandise has been shipped
Draft
issued by the exporter's bank, ordering the importer's bank to pay for the merchandise, thus guaranteeing payment once accepted by the importer's bank
World Trade Organization (WTO)
powerful successor to GATT that incorporates trade in goods, services, and ideas
Trading Company
provides a link between buyers and sellers in different countries
Absolute Advantage
the ability to produce a specific product more efficiently than any other nation