International Business CH.1 - Terms & Definitions

Transaction

The exchange of things of value

Business

activities involving the production, buying, and selling of goods and services to make a profit

domestic business

business conducted within a country's borders, involving local transactions and customers.

international business

business activities that occur across national borders

trade

Buying, selling, or exchanging goods and services.

interdependence

The reliance of countries on each other for resources, goods, and services

trading partner

One of two or more countries involved in a business relationship with another country or countries

Imports

Products or services purchased from another country

Exports

Products or services sold to another country

Balance of Trade

The difference in value between a country’s imports and exports

Trade Surplus

The amount by which the value of a country’s exports exceed the value of its imports

Trade deficit

The amount by which the value of a country’s imports exceeds the value of its exports

Domestic Market

The customers of a business who live in the country where the business operates

Duty(Tariff)

A tax most countries place on foreign imports to increase their price and make the price of domestic goods competitive

Foreign Markets

The customers of a business who live in different countries than the one where the business operates

foreign  direct investment (FDI)

Investment in a company that is located in a different country than the investor to control some or all of the business’s operations

portfolio investment

The purchase of stocks, bonds, and other financial instruments issued by Canadian firms by foreigners, which does not result in foreign management or control

branch plant

A factory owned by a company based in another country. For example, Kellogg’s head office is in Battle Creek, Michigan, but it has a subsidiary factory (a branch plant) in London, Ontario

globalization

The process whereby national or regional economies and cultures have become integrated

populism

An ideology with a concern for “the common” citizen at its core

protectionism

The theory or practice of shielding domestic industries from foreign competition, often through trade barriers such  as tariffs