C3 Quizlet KM
What factors affect the value of a country's currency?
-Balance of payments -Economic conditions -Political stability
What actions could be taken to encourage international trade?
-Free-trade zones -Free-trade agreements -Common markets
List the 4 main elements of the international business environment.
-Geography -Cultural influences -Economic development -Political and legal concerns
What are the main cultural and social factors that affect international business?
-Language -Religion -Values -Customs -Social relationships
What are the key factors that affect a country's level of economic development?
-Literal level -Technology -Agricultural Dependency
Why is it better for a country to export more than it imports?
-So it will not be too dependent on other countries . -So cash will be flowing into a country rather than out of it.
Reasons for Quotas
-To keep supply low and prices the same. -To express displeasure at the policies of the importuning country. -To protect one of a country's industries from too much competition from abroad.
Reasons for Embargo
-To protect a country's industries from international competition more than the quota or tariff will achieve. -To prevent sensitive products from falling into the hands of unfriendly groups or nations.
Reasons for Tariffs
-To set amount per pound, gallon, or other unit -To set the value of a good
How many jobs in the United States depends on international business?
1 out of every 6 jobs
What are three formal trade barriers?
1. Quotas 2. Tariffs 3. Embargoes
What is it when a country can produce a good or service at a lower cost than other countries?
Absolute advantage
The difference between a country's total payments to other countries and its total receipts from other countries?
Balance of payment
The difference between a country's total exports and total imports of goods
Balance of trade
How does balance of trade differ from balance of payments?
Balance of trade is the difference between a country's total exports and total imports.(Products) Balance of payments is the difference between the amount of money that comes into a country and the amount that goes out of it. (Dollars)
Which country has the largest trade imbalance with the U.S?
China w/ imbalance of -226.8
What is it called when members do away with duties and other trade barriers?
Common market
What type of members have a common external duty on products being imported from nonmember countries?
Common market members
What is a situation in which a country specializes in the production of a good or service at which it is relative more efficient?
Comparative advantages
What is the accepted behaviors, customs, and values of a society?
Culture
What is the amount a country owes to other countries?
Foreign debt
What is International business frequently referred to as?
Foreign trade OR World trade
What is it called when member countries agree to remove duties and trade barriers on products traded among them?
Free-trade agreement
What is a selected area where products can be imported duty-free and then stored assembled, and/or used in manufacturing?
Free-trade zone
How does importing differ from exporting?
Importing is bringing items from other countries into a country. Exporting is selling goods and services to other countries.
Goods and services bought from another country
Imports
What causes this situation of favorable balance of payments?
Increased demand for both the nation's products and it's currency
A nation's transportation, communication, and utility systems
Infrastructure
What refers to a nation's transportation , communication, and utility system?
Infrastructure
What are the cost of using someone else's money?
Interest rates
An agreement between two or more companies from different countries to share a business project
Joint Venture
How many countries does the United states conduct trade with?
MORE than 180 countries
Would many things you buy cost more or less without foreign trade?
More or not be available at all
An organization that conducts business in several countries
Multinational company
What is the result of a country sending more money out than brings in?
Negative balance of payment
A limit on the quantity of a product that may be imported or exported with a given period
Quota
What is it called when government sets a limit on the quantity of a product that may be imported or exported within a given period?
Quota
Give an example of a country that has absolute advantage?
Saudi Arabia in oil production AND Brazil in coffee
What is a tax that a government places on certain imported products?
Tariff
When a country has a favorable balance of payments, what happens to the currency?
Usually constant or rising
Can a country have a trade surplus with one country and a trade deficit with another?
Yes
Do some countries limit the amount of money their citizens can take out of the country when they travel?
Yes
Does each nation have its own banking system?
Yes
Is it difficult to determine national borders with international trade expanding every day?
Yes, these boundaries are no longer fully valid in defining economies
Goods and services sold to another country
Exports
What is the making, buying, and selling goods and services within a country's own borders?
Domestic business
Stopping the importing or exporting of a certain product or service
Embargo
What is it called when government, if it wishes, can stop the export or import of a product completely?
Embargo
The value of money of one country expressed in terms of the money of another country
Exchange Rate
What is the value of a currency in one country compared with the value in another?
Exchange rate
Government restrictions to reduce free trade
Trade Barrier
What is a restriction to free trade called?
Trade barrier
What is it called when a country imports more than it exports?
Trade deficit
What is it called when a country exports (sells) more than it imports (buys), and is said to be a favorable trade position?
Trade surplus
Is a negative balance favorable or unfavorable?
Unfavorable