Chapter 3

In 2018, Austria exported $122.5 billion and imported products valued at $118.8 billion. Austria had a(n):

favorable balance of trade

A policy of permitting the people of a country to buy and sell where they please, without restrictions, is called:

free trade

A(n) _____ is a tax levied by a nation on imported goods

tariff

The U.S. has one of the very few areas in the world where kaolin can be mined. Kaolin is a necessary ingredient in many products ranging from stomach medication to paper. The U.S.-produced kaolin is sold all over the world. Kaolin is a(n) _____ for the countries that purchase it.

import

Capital Radio PLC, the United Kingdom's biggest commercial radio firm announced in 2002 that it would cooperate with Walt Disney Co. to create a radio network for children under the age of 16. The company will broadcast to a potential audience of 25 million under the name Capital Disney. This new radio network will be created as the result of

joint venture

Shell Oil Company used Intertek Caleb Brett, an Australian research laboratory, to provide all analytical services needed to support one of its full scale refinery. With this _____, Shell replaced domestic employees at the site of the refinery with employees from the Australian firm.

outsourcing

When Grand Metropolitan, a British company, purchased U.S.-based Pillsbury Co. in order to expand its product line and the market for its existing consumer products, it was an example of a(n):

direct foreign investment

Botswana produces diamonds, copper, nickel, soda ash, meat, and textiles, which it sells to the members of the European Union. To Botswana, the diamonds, copper, nickel, soda ash, meat, and textiles it produces are examples of:

exports

CoolBrands International has entered an agreement with Binney & Smith to create a line of frozen novelties based on the Crayola brand, including pops, bars, sandwiches, cups, cones, sundaes and shakes. CoolBrands will pay Binney & Smith a royalty for the right to use the Crayola trademark. This is an example of

licensing agreement

The difference between a country's total payments to other countries and its total receipts from other countries is called its

balance of payments

The Sara Lee Company sells the Hanes brand of hosiery in the United States. The manufacturer of this hosiery brand in Great Britain sells it under the brand name of Pretty Polly. The Sara Lee Company is using _____ to broaden its global marketing base without investing in overseas plants and equipment

contract manufacturing

The European Union (EU) bans the importation of hormone-fed U.S. beef and bioengineered corn and soybeans on safety grounds although Americans eat this food every day. This ban is so consumers in the EU will buy domestic beef and products made from domestically produced corn and soybeans. This ban is an example of:

protectionism