Chapter 10- Business in a Global Economy

Global Economy

The interconnected economies of the nations of the world

International Trade

Involves the exchange of goods and services between nations

Multinational Corporation

A company that does business in many countries and has facilities and offices around the world

Trade

The activity of buying and selling goods and services in domestic or international markets

Imports

Goods and services that one country buys from another country

Exports

Goods and services that one country sells to another country

Comparative Advantage

The ability of a country or company to produce a particular good more efficiently than another country or company

Exchange Rate

The price at which one currency can buy another currency

Balance of Trade

The difference in value between a country’s imports and exports over a period of time

Protectionism

The practice of the government putting limits on foreign trade to protect businesses at home

Tariff

A tax placed on imports to increase their price in the domestic market

Quota

A limit is placed on the quantities of a product that can be imported

Embargo

A ban on the import or export of a product

Free Trade

Occurs when there are few or no limits on trade between countries