Keyterms ESP 3

The purchase, sale, or exchange of goods and services across national borders is called ______

International trade

______ is a trade theory which holds that a government can improve the economic well-being of the country by encouraging exports and stifling imports to accumulate wealth in the form of precious metals

Mercantilism

______ is the condition that results when the value of a nation's exports is greater than the value of imports.

Trade surplus

A condition that results when the value of a country's imports is greater than the value of its exports is called ______

Trade deficit

Sending goods to another country for sale or trade is called ______

Exporting

A trade theory which holds that nations can increase their economic well-being by specializing in goods that they can produce more efficiently than anyone else is called ______

Theory of absolute advantage

Bringing in goods from another country for sale or trade is called ______

Importing

______ is a trade theory which holds that nations should produce those goods for which they have the greatest relative advantage.

Theory of comparative advantage

______ is a trade theory which holds that nations will produce and export products that use large amounts of production factors that they have in abundance and will import products requiring a large amount of production factors that they lack.

Factor endowment theory

Financial assistance to domestic producers in the form of cash payments, low-interest loans, tax breaks, product price supports, or some other form is called ______

subsidy

When a government guarantees that it will repay the loan of a company if the company should default on repayment, it is called a ______

loan guarantee

A designated geographic region in which merchandise is allowed to pass through with lower customs duties and/or fewer customs procedures is called a (n)______

foreign trade zone

______ is a theory of the stages of production of a product with new "know-how: it is first produced by the parent firm, then by its foreign subsidiaries, and finally anywhere in the world where costs are the lowest; it helps explain why a product that begins as a nation's export often ends up as an import.

International product life cycle (IPLC) theory

A complete ban on trade (imports and exports) in one or more products with a particular country is called an______

Embargo

The______is the only international body dealing with rules of trade between nations.

WTO

______ is a trade theory which holds that a government can improve the economic well-being of the country by encouraging exports and stifling imports.

Neo-mercantilism

A treaty that was designed to promote free trade by reducing both tariffs and non-tariff barriers to international trade is called the______

GATT

A ______ is a government tax levied on a product as it enters or leaves a country.

tariff

A tariff levied by the government of a country that is exporting a product is called an ______

export tariff

A tariff levied by the government of a country that is importing a product is called an______

import tariff

A tariff levied as a percentage of the stated price of an imported product is called ______ tariff.

ad valorem

A tariff levied as a specific fee for each unit (measured by number, weight, etc.) of an imported product is called ______

specific tariff

A tariff levied on an imported product and calculated partly as a percentage of its stated price, and partly as a specific fee for each unit is referred to as a(n) ______

compound tariff

The ______ is the only international body dealing with rules of trade between nations.

WTO

When a company exports a product at a price lower than the price normally charged in its domestic market, it is said to be ______

dumping

______ is a trade theory that extends the concept of comparative advantage by bringing into consideration the endowment and cost of factors of production and helps to explain why nations with relatively large labour forces will concentrate on producing labour-intensive goods, whereas countries with relatively more capital than labour will specialise in capital-intensive goods.

Heckscher-Ohlin theory

A finding by Wassily Leontief, a Nobel Prize-winning economist, which shows that the United States, surprisingly, exports relatively more labour-intensive goods and imports capital-intensive goods.

Leontief paradox

The market in which currencies are bought and sold and in which currency prices are determined is called______

Foreign exchange market

The practice of insuring against potential losses that result from adverse changes in exchange rates is called ______

Currency hedging

______is the instantaneous purchase and sale of a currency in different markets for profit.

Currency arbitrage

______is the purchase or sale of a currency with the expectation that its value will change and generate a profit.

Currency speculation

In a quoted exchange rate, the currency with which another currency is to be purchased is called the ______

Quoted currency

In a quoted exchange rate, the currency that is to be purchased with another currency is called the ______

Base currency

The exchange rate requiring delivery of the traded currency within two business days is called ______

Spot rate

The exchange rate at which two parties agree to exchange currencies on a specified future date is called the ______

Forward rate

______ is a contract requiring the exchange of an agreed-upon amount of a currency on an agreed-upon date at a specific exchange rate.

Forward contract

A ______ is the simultaneous purchase and sale of foreign exchange for two different dates.

Currency swap

Currency that trades freely in the foreign exchange market, with its price determined by the forces of supply and demand is called a ______

convertible currency/ hard currency

An international monetary system in which nations linked the value of their paper currencies to specific values of gold was called the ______

Gold standard

A system in which the exchange rate for converting one currency into another is fixed by international agreement is called a ______

Fixed exchange rate system

The______ was an accord among nations to create a new international monetary system based on the value of the U.S. dollar.

Bretton Woods Agreement

The agency created by the Bretton Woods Agreement to provide funding for national economic development efforts is called the ______

World Bank

______was the agency created by the Bretton Woods Agreement to regulate fixed exchange rates and enforce the rules of the international monetary system.

The IMF

An exchange-rate system in which currencies float against one another with governments intervening to stabilize currencies at a particular target exchange rate is known as a______

Managed float system

______ is an exchange - rate system in which currencies float freely against one another, without governments intervening in currency markets.

Free float system

A ______is a right, or option, to exchange a specific amount of a currency on a specific date at a specific rate.

Currency option

______is a contract requiring exchange of a specific amount of currency on a specific date at a specific exchange rate with all of these conditions fixed and not adjustable.

Currency Futures contract

______ is a letter of credit calling for renewed credit to be made available when the issuing bank informs the beneficiary that the buyer has reimbursed the issuing bank for the drafts already drawn.

Revolving letter of credit

______ means two letters of credit with identical documentary requirements, except for the difference in the price as shown by the invoice and draft.

Back to back letter of credit

______ is a letter of credit that can be drawn against, but only if another business transaction is not performed.

Standby letter of credit

______ is a letter of credit issued by a bank and forwarded to the beneficiary by a second bank in his area. The second bank validates the signatures and attests to the legitimacy of the first bank.

Advised letter of credit

______ is a letter of credit issued by one bank to which a second bank adds its commitment to pay.

Confirmed letter of credit

______ is a letter of credit that may be canceled at any moment without prior notice to the beneficiary.

Revocable letter of credit

______ is a letter of credit that cannot be canceled nor amended without agreement of all parties.

Irrevocable letter of credit

______ is a letter of credit under which the documents are forwarded to the importer's bank, while sight draft is presented at a later future date.

Deferred payment letter of credit

______ is a letter of credit permitting the beneficiary to receive a sum prior to shipment.

Red clause letter of credit

______ is a letter of credit that can be utilized by someone designated by the original beneficiary.

Transferable letter of credit

The mode of payment in which a bank acts as an intermediary without accepting financial risk is called ______

Documentary collection

A document ordering an importer to pay an exporter a specified sum of money at a specified time is called ______

a Draft (Bill of exchange)

The mode of payment in which the importer's bank issues a document stating that the bank will pay the exporter when the exporter fulfills the terms of the document is called a ______

Letter of Credit (L/C)

A contract between the exporter and carrier that specifies the destination and shipping costs of the merchandise is called a ______

Bill of Lading

The mode of payment in which an exporter ships merchandise and later bills the importer for its value is called ______

Open account

The mode of payment in which an importer pays an exporter for merchandise before it is shipped is called ______

Advance Payment

____________ is the attempt to destroy unwholesome demand for products that are considered undesirable, e.g. cigarettes, drugs, handguns, or extremist political parties.

Countermarketing

____________ is the difficult task of reversing negative demand, e.g. for dental work, or hiring disabled people.

Conversional Marketing

____________ is necessary where there's no demand, which often happens with new products and services.

Stimulational Marketing

____________ involves developing a product or service for which there is clearly a talent demand, e.g. a non-polluting and fuel-efficient car.

Developmental Marketing

____________ involves altering the times pattern of irregular demand, e.g. for public transport between rush hours, or for ski resorts in the summer.

Synchromarketing

____________ involves revitalizing falling demand, for example, for churches, inner city areas, or aging film stars.

Remarketing

____________ is the attempt (by governments rather than private businesses) to reduce overall demand, permanently or temporarily, e.g. for some roads and bridges during rush hours.

Demarketing

____________ is a matter of retaining a current (may be full) level of demand, in the face of competition or changing tastes.

Maintenance Marketing

A business and industry which acts as a third-party local representative and distribution point for a manufacturing firm.

Distributor

______ is the systematic and coordinated set of activities required to provide the physical movement and storage of goods (raw materials, parts, finished goods) from vendor/supply services through company facilities to the customer (market) and the associated activities - packaging, order processing, etc. - in an efficient manner necessary to enable the organization to contribute to the explicit goals of the company.

Business Logistics

An organization which provides logistics services as an intermediary between the shipper and the carrier, typically on international shipments.

Freight Forwarder

______ is that part of supply chain management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customers' requirements.

Logistics management

______ is an independent computer system, owned by independent organizations, linked in a manner to allow direct updates to be made to one system by another.

Linked distributed system

______ is a term describing the process whereby machines are remotely monitored for status and problems reported and resolved automatically or maintenance scheduled by the monitoring systems.

Machine-to-Machine interface (M2M)

______ is a comprehensive, system-wide view of the entire supply chain as a single process, from raw materials supply through finished goods distribution. All functions that make up the supply chain are managed as a single entity, rather than managing individual functions separately.

Integrated logistics

The network of supply chain participants engaged in storage, handling, transfer, transportation, and communications functions that contribute to the efficient flow of goods.

Logistics channel

______ is a computerized system to electronically transmit logistics information.

Logistics data interchange (LDI)

______ encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities.

Supply Chain Management

______ is the process of planning, implementing, and controlling the flow and storage of goods, which aims at ensuring that the right product will be in the right place at the right time in the most cost-efficient way based on customers' needs.

Logistics

One or more companies or individuals who participate in the flow of goods and services from the manufacturer to the final user or consumer.

Distribution channel

______ is the total time that elapses between an order's placement and its receipt. It includes the time required for order transmittal, order processing, order preparation, and transit.

Lead time

A ______ is a warehouse positioned to replenish customer inventory assortments and to afford maximum inbound transport consolidation economies from inventory origin points with relatively short-haul local delivery.

Market-positioned warehouse

______ is a service unique to international trade and relates to an individual or firm that specializes in one or more of the activities preceding Main Carriage, such as consolidation, packing, marking, sorting of merchandise, inspection, storage, etc.

Marshaller or Marshalling agent

______ is the planning, directing, monitoring, and controlling of the processes related to customer orders, manufacturing orders, and purchase orders.

Order management

______ is a transportation network that automatically routes one or more material handling devices, such as carts or pallet trucks, and positions them at predetermined destinations without operator intervention.

Automated guided vehicle system (AGVS)

______ is a transportation document that is the contract of carriage containing the terms and conditions between the shipper and carrier.

Bill of Lading (BOL)

______ is transportation available to the public that does not provide special treatment to any one party and is regulated as to the rates charged, the liability assumed, and the service provided.

Common carrier

The company will ______ the policy-holder against loss of or damage to the insured vehicle.

indemnify

Ship's cargoes are covered by ______ insurance policies.

marine

The most complete insurance is against ______

all risks

______ is a standard form contact between the insured and the insurer, which determines the claims that the insurer is legally required to pay.

insurance policy

______ is payments to the insurance company to buy a policy and to keep it in force.

premium

______ is the loss/damages caused by special expenses and sacrifices that intensionally and reasonally conducted to save the vessel, cargo and freight from a threat in the common ocean voyage.

general average

The party to an insurance arrangement who undertakes to indemnify for losses is the ______

insurer/underwriter

______ is the person or entity buying the insurance and receiving indemnity on happening of unforeseen events.

the insured/policy-holder

The person, group, or property for which an insurance policy is issed is ______

the subject-matter insured

______ is a contract whereby, in return for the payment of premium by the insured, the insurers pay the financial losses suffered by the insured as a result of the occurence of unforeseen events.

insurance