International Trade and Business

Countries

Countries

Sovereign states with specific geographical regions, distinct cultures, languages, and people, politically organized and separate from each other.

Global

Adjective meaning concerning the entire earth, synonymous with worldwide, universal, unlimited, unbounded, general, and comprehensive.

International

Adjective meaning 'concerning two or more nations.'

International Business

Comprises the impact of practices on domestic and international markets, economies, states, companies, and individuals.

Cross-border business

Operates on large scales involving multiple jurisdictions.

Challenges of International Business

Include political and legal differences, cultural differences, economic differences, currency unit differences, language differences, marketing infrastructure differences, trade restrictions, high costs of distance, differences in trade practices, material culture, cultural preferences, languages, education, religion, ethics and values, and social organization.

Globalization

Interdependence of the economies, societies, and populations of the world brought on by cross-border trade in products and services, technology, investment, citizens, and knowledge flows.

Globalization in Geography

Processes contributing to the relationship between societies and individuals worldwide in economic, social, cultural, technological, and institutional aspects.

Economic globalization

Development of trade systems involving transactional actors like corporations or NGOs.

Financial globalization

Linked to the rise of a global financial system through international economic and monetary exchanges.

Cultural globalization

Interpenetration of cultures leading to the adoption of other nations' principles, beliefs, and customs.

Political globalization

Growth and impact of international organizations like the UN or WHO, leading to policy actions at the international level.

Sociological globalization

Interconnection and interdependence of events and their consequences, traveling almost in real-time.

Technological globalization

Interconnection of millions of people via digital platforms like Facebook, Instagram, Skype, or YouTube.

Geographic globalization

Ever-changing modern structure and hierarchy in various parts of the world.

Ecological globalization

Concept of seeing the planet Earth as a single global object, emphasizing the need for global protection.

Demand

Fundamental aspect of market exchanges and economic activity, representing the willingness and ability to buy goods and services at various prices.

Demand Curve

Graphical representation of the law of demand, showing the relation between demand price and quantity demanded.

Supply

Fundamental aspect of market exchange based on ownership and control of scarce resources used to produce goods and services.

Law of Supply

Specific relation between price and quantity supplied, showing the direct relation between supply price and quantity supplied.

Supply Curve

Graphical representation of the supply relation between supply price and quantity supplied.

Market Equilibrium

State where demand and supply forces offset each other.

Equilibrium Price

Price when quantity demanded equals quantity supplied.

Equilibrium Quantity

Quantity exchanged at market equilibrium.

International Trade

Exchange of goods and services among nations.

Comparative Advantage

Ability to produce at lower opportunity cost than others.

Absolute Advantage

Ability to produce at lower cost per unit than others.

Ricardian Model

Theory of countries specializing in comparative advantage.

Heckscher-Ohlin Model

Emphasizes factors of production in international trade.

Gravity Model of Trade

Explains international trade based on economic size and distance.

Imports

Goods/services produced abroad and purchased domestically.

Exports

Goods/services produced domestically and sold abroad.

Net Exports

Difference between exports and imports.

Balance of Trade

Difference between a nation's exports and imports.

Foreign Exchange Rate

Currency rate used in international transactions.

Fixed Exchange Rate

Rate set and maintained by government actions.

Flexible Exchange Rate

Rate determined by supply and demand in the market.

Managed Flexible Exchange Rate

Rate adjusted by market forces with government intervention.

Balance of Payments

Record of a country's international payment flows.

Economic Equilibrium

Aggregate income equals aggregate expenditure.

Winners in International Trade

Consumers and producers benefiting from trade.

Losers in International Trade

Producers and consumers facing challenges in trade.