Review of Globalization and International Business Concepts

These flashcards cover key concepts and definitions related to globalization and international business, providing a comprehensive study tool for exam preparation.

Globalization

The process where national or regional economies and cultures become integrated.

Major Trading Partners

The countries with which Canada primarily engages in trade, notably the USA and the United Kingdom.

Portfolio Investment

When an individual or corporation from another country buys stocks or bonds issued by a domestic company or government.

Foreign Direct Investment (FDI)

Involves a foreigner or foreign company acquiring a controlling interest in a domestic company.

Balance of Trade

The relationship between a nation's imports and exports, calculated as the monetary value difference over a period.

Trade Deficit

Occurs when imports exceed exports, indicating greater reliance on foreign goods.

Trade Surplus

Occurs when exports exceed imports, suggesting less reliance on foreign goods and often seen as a sign of a strong economy.

Boycott

A voluntary act of abstaining from using, buying, or dealing with a specific entity as a form of protest.

Business Cycle

Refers to recurring periods of economic expansion and contraction, consisting of four main stages.

Recession

A stage in the business cycle where demand decreases, businesses reduce production, and jobs become scarce.

Trough

The lowest point of economic activity in the business cycle.

Expansion

A stage in the business cycle where jobs reappear, demand increases, and economic confidence is restored.

Peak

The highest point of economic activity in the business cycle characterized by low unemployment and high consumer spending.

Currency Devaluation

The deliberate lowering of the value of a nation's currency by its policymakers.

Gateway City

A city that serves as a primary entry and departure point for international shipments and travel.

Economies of Scale

Occurs when producing more units of a product reduces the cost per unit due to fixed overhead costs.

Gross Domestic Product (GDP)

The total monetary value of all goods and services produced within a country during a specific period.

Monopoly

A market situation where a single business is the sole supplier of a particular good or service.

Protectionism

The practice of shielding domestic industries from foreign competition through tariffs and other measures.

Rationalization

Actions taken by a business to increase its effectiveness or efficiency.

Strategic Alliances

Occur when two companies with different products or services collaborate to achieve a shared objective.

Import Business

Facilitates the bringing of foreign goods into a country for domestic sale.

Export Business

Sells goods produced domestically to other countries.

Joint Ventures (JVs)

Created when two or more companies merge to form a new, distinct company.

Licensing

An agreement where a licensor grants a licensee permission to use intellectual property.

Franchising

A business model where a franchisor grants individuals the right to operate under its brand name.

Wholly Owned Subsidiaries

Companies that are entirely owned by a parent company.

Economic Systems

A set of practices and laws determining how a society utilizes its resources to fulfill needs.

Pure Command Economy

An economy where the government controls all economic decisions and resources.

Pure Market Economy

An economy primarily driven by private enterprise with minimal government intervention.

Mixed Economy

An economic system combining features of command and market economies.

Democracy

A political system characterized by free elections and personal freedoms.

Autocracy

A government system ruled by a single individual or a small group.

Interdependence

The mutual reliance between individuals, businesses, and nations for goods and services.

Consumer-Business Reliance

The dependence of consumers on businesses for daily needs and businesses on consumers for profit.

Business-to-Business Reliance

When one company depends on another company for supplies.

Global Interdependence

Nations relying on each other for goods and resources across borders.

Absolute Advantage

Exists when a country can produce a specific good more efficiently than another country.

Comparative Advantage

Exists when a country can produce a good at a lower opportunity cost than another country.

Opportunity Cost

The value of the next best alternative that is sacrificed when making an economic choice.

Primary Industries

Industries involved in the extraction and basic processing of raw materials.

Secondary Industries

Industries involved in manufacturing goods from raw materials.

Tertiary Industries

Services provided to businesses and consumers, also known as the service sector.

Tariffs

Taxes imposed on imported goods to protect domestic industries.

Quotas

Limits on the quantity of specific goods that can be imported into a country.

Trade Sanctions

Restrictions on international trade often used as a protest.

Foreign Investment Restrictions

Limitations placed by governments on foreign investments.

Currency Fluctuations

Changes in currency values that can create trade barriers.

Embargoes

A complete ban on trade with another country due to policy disagreements.