Doing Business in Global Markets

These flashcards cover key terms and concepts from the chapter on doing business in global markets, aiding in exam preparation.

Global market

A market that encompasses the entire world, consisting of a population of 8 billion potential customers.

Free trade

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

Comparative advantage

A theory stating that a country should sell products it can produce most efficiently and buy those it cannot produce as effectively.

Absolute advantage

When a country can produce a specific product more efficiently than all other countries.

Trade surplus

Occurs when the value of a country's exports exceeds that of its imports.

Trade deficit

Occurs when the value of a country's imports exceeds that of its exports.

Foreign Direct Investment (FDI)

The buying of permanent property and businesses in foreign nations.

Multinational corporation

An organization that manufactures and markets products in many different countries.

Sovereign wealth funds (SWFs)

Investment funds controlled by governments, holding large stakes in foreign companies.

Dumping

Selling products in a foreign country at lower prices than those charged in the producing country.

Trade Protectionism

The use of government regulations to limit the import of goods and services.

Tariffs

Taxes imposed on imports intended to protect domestic industries.

Embargo

A complete ban on the import or export of a certain product or the stopping of all trade with a particular country.

World Trade Organization (WTO)

An independent entity of member nations overseeing cross-border trade issues and global business practices.

Common Markets

Regional groups of countries with a common external tariff and no internal tariffs.

Offshore outsourcing

The process of contracting with other companies abroad to perform some or all business functions.