Future of Business - Althouse: Chapter 5
Exchange Controls
Laws that require a company earning foreign exchange from its exports to sell the foreign exchange to a control agency, such as a central bank.
Licensing
Legal Process whereby a company allows to let another company use a manufacturing process, trademark, patent, trade secret, or other proprietary knowledge in turn for being paid an agreed amount.
NAFTA
North American Trade Agreement (Includes Canada, USA, Mexico)
Dumping
The practive of charging a lower price for a product in foreign markets than in the company's home market. - Unfairly low prices - Harms domestic Market
Natural Barriers of International Trade
- Distance - Language - Culture - Legal and Regulatory
Imports
A good bought in a country in which it was not made in.
Tariff
A tax imposed on imported goods.
Embargo
A total ban on imports or exports of a product.
International Monetary Fund (IMF)
Gives short term loans to developing countries.
Exports
Goods made in one country and sold outside of that country.
Trade Defficit
Imports > Exports
World Bank
Offers low interest loans to developing nations as well as advice and information. Countries must pledge to lower trade barriers and encourage private enterprise in order to get a loan.
Balance of Payments
Summary of a country's international financial transactions showing the difference between the country's total payments and total receipts from other countries.
Protective Tarrifs
Tariffs that are imposed to make imports less attractive to buying than domestic products.
Balance of Trade
The difference between the value of a country's imports and exports.
Direct Foreign Investment
Active ownership of a foreign company or manufacturing or marketing facility in a foreign country.
World Trade Organization (WTO)
An organization established in 1994 to oversee international trade, reduce trade barriers, and resolve disputes among member nations.
ASEAN
Association of Southeast Asian Nations
Mercosur
Common market of the south (south american) includes Argentina, Brazil, Paraguay, Uruguay, and Venezuela
EU
European Union
Trade Surplus
Exports > Imports
Customs Regulations
Regulations on products that are different from generally accepted international standards.
Joint Venture
A business agreement in which two or more businesses agree to pool their resources for a specific project or business venture.
Contract Manufacuring
A foreign company manufactures private label goods under a domestic company's brand.
Countertrade
A form of international trade in which part or all of the payment for goods or services is in the for of other goods or services (basically bartering).
Import Quota
A limit on the quantity of a certain good that can be imported. also known as a quantitative restraint.
Economic Environment
Infrastructure: basic institutions and public facilities on which an economy's development depends.
Nationalism
The sense of a national consciousness that boosts the culture and interests of on country over those of all other countries.
Floating Exchange Rates
A system in which prices of currencies move up and down based on the demand and supply of various currencies.
Multinational Corporation
Corporations that move resources, goods, services, and skills across national boundaries without regard to the country in which they are headquartered.
