Dynamics of buisness and economics L.1

European Union (EU)

A group of European countries that promote free trade, shared laws, and economic cooperation.

Exchange controls

Government restrictions on buying or selling foreign currency.

Exchange rate

The value of one currency compared to another.

Exporting

Selling goods or services to other countries.

Franchising

When a company allows another person or business to use its brand and business model for a fee.

General Agreement on Tariffs and Trade (GATT)

An international agreement created to reduce trade barriers between countries.

Global strategy (globalization)

A business approach that treats the world as one large market with standardized products.

Import tariff

A tax on imported goods to make them more expensive.

Importing

Buying goods or services from other countries.

Infrastructure

A country's basic systems and facilities, such as transportation, communication, and power supply.

International business

The exchange of goods, services, and ideas across national borders.

International Monetary Fund (IMF)

An organization that helps stabilize global currencies and provides financial aid to countries in crisis.

Joint venture

A business partnership where two or more companies share ownership and control of a new project.

Licensing

Allowing a foreign company to use your brand, patents, or technology in exchange for a fee or royalty.

Multinational corporation (MNC)

A company that operates in multiple countries.

Multinational strategy

A business approach that adapts products and marketing to each country's market.

Offshoring

Moving a company's production or services to another country to reduce costs.

Outsourcing

Hiring another company to perform tasks or produce goods instead of doing them internally.

Quota

A limit on the amount of a product that can be imported into a country.

Strategic alliance

A partnership between companies to achieve a common goal without forming a new company.

Trade deficit

When a country's imports exceed its exports.

Trading company

A firm that buys goods in one country and sells them in another.

United States-Mexico-Canada Agreement (USMCA)

A trade agreement between the U.S., Mexico, and Canada that replaced NAFTA.

World Bank

An international organization that provides loans and aid for development projects in poorer countries.

World Trade Organization (WTO)

A global organization that regulates international trade and resolves trade disputes between countries.

Absolute advantage

When a country can produce a good more efficiently (using fewer resources) than another country.

Asia-Pacific Economic Cooperation (APEC)

An organization of countries in the Asia-Pacific region that works to promote free trade and economic cooperation.

Association of Southeast Asian Nations (ASEAN)

A regional group of Southeast Asian countries that aims to encourage economic growth, peace, and stability.

Balance of payments

A record of all financial transactions between one country and the rest of the world.

Balance of trade

The difference between a country's exports and imports of goods and services.

Cartel

A group of companies that work together to control prices or limit competition.

Comparative advantage

When a country produces goods at a lower opportunity cost than another country.

Contract manufacturing

When a company hires a foreign firm to produce its products.

Countertrade agreements

Trading goods and services without using money, such as through bartering.

Direct investment

When a company builds or buys business operations in another country.

Dumping

Selling products in a foreign market below domestic prices or production cost, lower than you made it for. To kick out other competitors in other country's.

Embargo

A government ban on trade with a specific country or the exchange of certain goods.