Business: Chapter 4
European union
A European trading bloc
Product Life Cycle Theory
products and services go through four stages: introduction, growth, maturity, and decline
World Bank
provides low-cost, long-term loans to less-developed countries to develope basic industries and facilities
Capital account
records investment funds coming into and going out of a country
Current Account
records the value of goods and services exported and those imported from foreigners, as well as other incomes and payments
Subsidiary
Foreign branches
NAFTA
a free trade agreement between U.S., Mexico, and Canada that removed tariffs and other barriers to trade among the three nations
Balance of Payments
an accounting statement in which all international transactions are recorded
Trading bloc
an agreement between two or more countries to remove all restrictions between them on the sales of goods and services, while imposing barriers on trade and investment from countries that are not part of the bloc
World Trade Organization
an international organization that creates and enforces the rules governing trade among countries
International Monetary Fund
helps countries that are facing serious financial difficulties in paying for their imports or repaying loans
International licensing
occurs when one company allows a company in another country to make and sell prodcuts according to certain specifications
Comparative Advantage Theory
states that to gain a trade advantage, a country should specialize in products or services that it can provide more efficiently than can other countries
High-context culture
when communication tends to occur through non-verbal signs and indirect suggestions
Strategic Alliances
when firms agree to cooperate on certain aspects of business while remaining competitors on other aspects
Low-context culture
when people communicate directly and explicitly
Wholly-owned subsidiary
when the firm sets up a business abroad on its own without any partners
Joint Venture
when two or mor firms share the costs of doing business and also share the profits