Ch 4-Doing Business in Global Markets

These flashcards cover key terms and concepts related to global business and trade, including definitions of key economic principles and trade strategies.

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Global Trade

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

Importing

The act of buying products from another country.

Exporting

The act of selling products to another country.

Comparative Advantage

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

Absolute Advantage

A situation where a country can produce a good more efficiently than another country.

Trade Protectionism

Government regulations that restrict international trade to protect local industries.

Tariffs

Taxes imposed on imported goods to increase their price.

Embargo

A government order that restricts or prohibits trade with a specific country.

Foreign Direct Investment (FDI)

Investment made by a company in one country in business interests in another country.

Multinational Corporation (MNC)

A company that operates in multiple countries and has business facilities and assets in those countries.

Joint Venture

A business arrangement where two or more parties agree to pool their resources for a specific task.

Outsourcing

The practice of hiring external firms to handle certain business functions.

Balance of Trade

The difference in value between a country's imports and exports.

Dumping

Selling products in a foreign country at lower prices than in the producing country.

Sovereign Wealth Funds (SWFs)

Investment funds controlled by national governments, often holding large stakes in foreign companies.

Economic Forces

Factors that affect the economic conditions and performance of countries in global markets.

Cultural Differences

Variations in the way different cultures behave and interact, which can impact global business.

NAFTA

North American Free Trade Agreement, which created a free-trade area among the U.S., Canada, and Mexico.

USMCA

United States-Mexico-Canada Agreement, the new agreement replacing NAFTA with updated trade rules.

Ethnocentricity

The belief that one’s own culture is superior to others.

Trade Deficit

When a country's imports exceed its exports, indicating negative trade balance.

Trade Surplus

When a country's exports exceed its imports, indicating positive trade balance.