Competing in Global Markets

This set of flashcards covers key vocabulary terms and concepts related to competing in global markets, including definitions of trade theories, practices in importing and exporting, and the dynamics of international trade agreements.

The theory of Comparative Advantage

The economic theory that countries should export goods and services they produce most efficiently and import those they do not produce efficiently.

Absolute Advantage

A condition in which a country has a monopoly on a specific product or can produce it more efficiently than any other country.

Free Trade

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

Importing

The act of buying products or services from another country.

Exporting

The act of selling products or services to another country.

Trade Surplus

A favorable balance of trade that occurs when a country's exports exceed its imports.

Trade Deficit

An unfavorable balance of trade that happens when a country's imports exceed its exports.

Tariff

A tax imposed on imports.

Non-Tariff Barriers

Regulations and policies other than tariffs that countries use to control the amount of trade across their borders.

Joint Venture

A partnership in which two or more companies, often from different countries, undertake a major project or form a new company.

Franchising

An arrangement where someone with a good business idea sells the rights to use the business name and sell the product or service to others in a given territory.

Outsourcing

The practice of having certain job functions done outside a company instead of having an in-house department handle them.

Export Trading Company

A company that assists others in establishing trading relationships between different countries.

Cultural Relativism

An attitude that a person's own culture is superior or better understood in relation to other cultures.

Dumping

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

Define: The World Trade Organization (WTO)

An international body that regulates and facilitates international trade agreements and resolves disputes between countries.

United States Mexico Canada Agreement (USMCA)

A trade agreement that coordinates trade between Canada, the United States, and Mexico, improving certain areas from the previous NAFTA agreement.

Economic Globalization

The process of increasing economic interdependence among countries through trade, investment, and capital flows.