Doing Business in Global Markets

These flashcards cover key vocabulary terms related to global business and trade, tailored for exam preparation.

Global Trade

The exchange of goods and services between countries, involving both importing and exporting.

Importing

The act of buying products from another country.

Exporting

The act of selling products to another country.

Free Trade

The movement of goods and services among nations without political or economic barriers.

Comparative Advantage

The ability of a country to produce a good or service at a lower opportunity cost than another country.

Absolute Advantage

The ability of a country to produce a specific product more efficiently than all other countries.

Trade Surplus

A favorable balance of trade where exports exceed imports.

Trade Deficit

An unfavorable balance of trade where imports exceed exports.

Dumping

The practice of selling products in a foreign country at lower prices than those charged in the producing country.

Foreign Direct Investment (FDI)

The buying of permanent property and businesses in foreign nations.

Multinational Corporation

An organization that manufactures and markets products in multiple countries, with multinational stock ownership and management.

Trade Protectionism

The use of government regulations to limit the import of goods and services to protect domestic industries.

Tariffs

Taxes imposed on imports to protect domestic industries or generate revenue.

Embargo

A complete ban on the import or export of a particular product or trade with a specific country.

Sovereign Wealth Funds (SWFs)

Investment funds controlled by governments that hold large stakes in foreign companies.

Offshore Outsourcing

The practice of contracting with companies abroad to perform some or all business functions.

Reshoring

The process of bringing manufacturing and services back to the home country.

International Joint Ventures

Partnerships in which two or more companies from different countries cooperate to undertake a major project.

Franchising

A contractual agreement where a company sells the rights to use its name and sell a product or service in a specified territory.

Balance of Payments

The difference between money coming into a country and money leaving the country, including factors like tourism and foreign aid.

Countertrading

A complex form of bartering involving multiple countries trading goods or services.