Trade ch.3

Exports

. Exports are goods and services made in one country and sold to others.

Embargo

A ban on trade

absolute advantage

A country has an absolute advantage when it can produce and sell a product at a lower cost than any other country or when it is the only country that can provide a product.

Outsourcing

Sending domestic jobs to another country is called

Dumping

The practice of charging a lower price for a product in foreign markets than in the firm's home market.

Devaluation

a nation lowers the value of its currency relative to other currencies. This makes that country's exports cheaper and should, in turn, help the balance of payments.

Global vision

means recognizing and reacting to international business opportunities, being aware of threats from foreign competitors in all markets, and effectively using international distribution networks to obtain raw materials and move finished products to the customer.

free trade

is the policy of permitting the people and businesses of a country to buy and sell where they please without restrictions

trade surplus

exports exceed imports

Trade deficit

imports exceed exports

protectionism

Opposite of free trade. in which a nation protects its home industries from outside competition by establishing artificial barriers such as tariffs and quotas. I

Balance of trade

The difference between the value of a country's exports and the value of its imports during a specific time is the country's

Imports

are goods and services that are bought from other countries. The United States is both the largest exporter and the largest importer in the world.