BSAD 1010 ch3

multilateral development bank (MDB)

an internationally supported bank that provides loans to developing countries to help them grow

Revenue tariffs

are imposed solely to generate income for the government. For example, the United States imposes a duty on Scotch whiskey solely for revenue purposes.

Reasons against trade restrictions

-Restriction of consumers' choices -Restriction of consumers' choices -Misallocation of international resources. Loss of jobs.

Which of the following banks specifically makes short-term loans to developing countries experiencing balance-of-payment deficits?

The International Monetary Fund (IMF)

What is the main function of the Export-Import Bank of the United States?

To assist in financing the exports of American firms

A joint Venture

a partnership formed to achieve a specific goal or to operate for a specific period of time.

absolute advantage

the ability to produce a specific product more efficiently than any other product.

Which countries are the United States' best trading partners for U.S. exports?

Canada and Mexico

Who supports multilateral development banks (MDB)?

Industrialized nations

Reasons for Trade Restrictions

-To equalize a nation's balance of payments. -To protect new or weak industries -To protect national security -To protect domestic jobs -To retaliate for another nation's trade restrictions -To protect the health of citizens

A bill of lading is defined as:

multinational enterprise.

Which U.S. government export assistance program facilitates advocacy to assist U.S. firms competing for major projects and procurements worldwide?

Advocacy Center

balance of trade is negative and is said to be unfavorable.

If a country imports more than it exports-A negative balance of trade is unfavorable because the country must export money to pay for its excess imports

Which of the following U.S. government export assistance programs offers assistance and information to exporters through its domestic and overseas commercial officers?

International Trade Administration

What is the famous principle of the General Agreement on Tariffs and Trade (GATT), which means that each member nation is to be treated equally by all contracting nations?

Most-favored-nation status (MFN

Which of the following is a reason for trade restrictions?

Protection for new or weak industries

Which organization or U.S. government export program publishes guides that offer assistance and exporting information to small and medium-sized companies?

Small Business Administration

According to the International Monetary Fund (IMF), what are the world economic growth projections?

The IMF predicts a gradual global growth in both advanced and developing countries.

Which of the following agreements, when ratified, created a free trade area among the United States, Mexico, and Canada?

The North American Free Trade Agreement (NAFTA)

The organization established by the Uruguay Round of the GATT, whose purpose is to mediate trade disputes among nations is called:

World Trade Organization (WTO).

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

letter of credit

a legal document issued by a bank or other financial institution guaranteeing to pay a seller a stated amount for a specified period of time

nontariff barrier

a nontax measure imposed by a government to favor domestic over foreign suppliers

strategic alliance

a partnership formed to create competitive advantage on a worldwide basis

Tariff (Import Duty)

a tax levied on a particular foreign product entering a country

Countertrade

an international barter transaction in which goods and services are exchanged for different goods and services.

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

Protective tariffs

are imposed to protect a domestic industry from competition by keeping the price of competing imports level with or higher than the price of similar domestic products.

The United States is efficient at producing software and engineering services, but cannot produce clothes and electronics as efficiently as other nations. As such, the United States sells software and engineering services to other countries and buys clothes and electronics. This is an example of:

comparative advantage.

Brazil has excellent resources and expertise to farm and produce coffee beans, whereas the United States is ill-suited for the production of coffee. Brazil should:

continue to produce coffee and trade it for U.S. products Brazil needs and cannot produce.

A bill of lading is defined as:

document issued by a transport carrier to an exporter to prove that merchandise has been shipped

The selling of products in a foreign country at lower prices than those charged in the producing country is called:

dumping

Dumping

exportation of large quantities of a product at a price lower than that of the same product in the home market

A country may attempt to protect its own domestic industries by imposing a(n) _____, a type of tax, on imported products.

import duty/tariff

Balance of payments includes

imports and exports, investments, money spent by foreign tourists, payments by foreign governments, aid to foreign governments, and all other receipts and payments.

Currency devaluation ___________ the cost of foreign goods and _______ the cost of domestic goods to foreign firms

increases; decreases

A nation's balance of payments

is the total flow of money into a country minus the total flow of money out of that country over some period of time.

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

trading company

provides a link between buyers and sellers in different countries

Sub-Saharan Africa is home to __________ of the top-ten fastest-growing economies in the world.

seven

comparative advantage

the ability to produce a specific product more efficiently than any other product.

A country with a trade surplus generally has a favorable balance of payments, which means:

the country is receiving more money from trade with foreign countries than it is paying out.

A nation's balance of trade

the total value of its exports minus the total value of its imports over some period of time