POBF: Intro to Business: Chapter 3 - Business in the Global Economy
quota
A limit on the quantity of a product that may be imported and exported within a given period.
infrastructure
A nation's transportation, communication, and utility systems. like transportation, communication, and utilities.
free-trade zone
A selected area where products can be imported duty-free and then stored, assembled, and/or used in manufacturing.
tariff
A tax that a government places on certain imported products.
International business
All business activities that involve exchanges across national boundaries
joint venture
An agreement between two or more companies from different countries to share a business project.
Trade surplus
An economic measure of a positive balance of trade, where a country's exports exceeds its imports. A trade surplus represents a net inflow of domestic currency from foreign markets, and is the opposite of a trade deficit, which would represent a net outflow.
multinational company (MNC)
An organization that conducts business in several countries.
World Trade Organization (WTO)
Created in 1995 to promote trade around the world. With over 150 member countries, this organization settles disputes and enforces free-trade agreements between its members.
global stratagy
Global strategy, as defined in business terms, is an organization's strategic guide to globalization. Learning Objective. Explain the concept of global strategy within the context of international business and a globalized economy. like using the same commercial through the world
imports
Goods and services bought from another country.
exports
Goods and services sold to another country.
trade barrier
Government restrictions to reduce free trade.
International Monetary Fund (IMF)
Helps promote economic cooperation among its 150 nations and maintains an orderly system of world trade and exchange rates. It was established in 1946 when the economic interdependence among nations was growing at a greater pace than ever before in history.
International Development Association (IDA)
Makes loans to help developing countries.
free-trade agreement
Member countries agree to remove duties and trade barriers on products traded among them. This results in increased trade between the members.
franchise
Right to use a company name of business process in a specific way.
licensing
Selling the right to use some intangible property like production process, trademark, or brand name for a fee or royalty. Example: The Gerber Company started selling its baby food products in Japan by this means.
embargo
Stopping the importing or exporting of a certain product or service.
Trade deficit
a nation's negative balance of trade, which exists when that country imports more products than it exports
political instability
as the propensity of a government collapse, and we estimate a model in which political instability and economic growth are jointly determined.
180+
how many countries does the U.S. conduct trade with
key effects on a country's level of economic development
literacy level, and technology
Comparative advantage
Exists when a country specializes in the production of a good or service at which it is relatively more efficient.
World Bank
The International Bank for Reconstruction and Development and is commonly called ____ _____. It was created in 1944 to provide loans for rebuilding after World War II. Today, its key function is to give economic aid to less developed countries.
balance of trade
The difference between a country's total exports and total imports of goods.
balance of payments
The difference between a country's total payments to other countries and its total receipts from other countries.
literacy rate
The rate of how many people can read or write
exchange rate
The value of money of one country expressed in terms of the money of another country.
Absolute advantage
the ability of an individual or group to carry out a particular economic activity more efficiently than another individual or group. Example: South American countries have an absolute advantage in coffee production, and Saudi Arabia has an absolute advantage in oil production.
interest rate
the proportion of a loan that is charged as interest to the borrower, typically expressed as an annual percentage of the loan out standing