International Business and Competing in World Markets

A series of flashcards covering key concepts from the chapter on International Business and Competing in World Markets.

Balance of Trade

The difference between a nation’s imports and exports.

Absolute Advantage

A country can maintain a monopoly or produce at a lower cost than any competitor.

Comparative Advantage

A country can supply a product more efficiently and at a lower cost compared with other countries.

Exports

Domestically produced goods and services sold in other countries.

Imports

Foreign-made products and services purchased by domestic consumers.

Trade Barriers

Obstacles that countries impose to restrict trade with other nations.

Tariffs

Taxes or duties on imported goods that generate income for the government.

Globalization

The increasing interconnectedness and interdependence of national economies.

Direct Investment

The ultimate level of global involvement involving direct operation of production and marketing in a foreign country.

Franchising

A contractual agreement in which a local entity gains rights to sell the franchisor’s products in the foreign market.

Offshoring

The relocation of business processes to a lower-cost overseas location.

World Trade Organization (WTO)

An organization that succeeded GATT and works to reduce tariffs and promote trade.

Balance of Payments

The overall flow of money into or out of a country.

Multinational Corporation

A corporation that has its facilities and other assets in at least one country other than its home country.

CIA World Factbook

A good starting point for research on foreign regulations and standards.

Nontariff Barriers

Restrictions that countries impose not involving tariffs, including quotas and administrative barriers.