Term
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Definition
| Selling products to another country. |
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Definition
| Buying products from another country. |
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Term
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Definition
| The movement of goods and services among nations without political or economic obstruction. |
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Term
| Comparative advantage theory is... |
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Definition
| This theory states that a country should sell to other countries those products that it produces most effectively and efficiently, and buy from other countries those products that it cannot produce as effectively or efficiently. |
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Term
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Definition
| The advantage that exists when a country has a monopoly on producing a specific product or is able to produce it more efficiently than all other countries. |
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Term
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Definition
| A nation's ratio of exports to imports. |
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Term
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Definition
| An unfavourable balance of trade. |
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Term
| When does a trade deficit occur? |
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Definition
| When the value of a country's imports exceeds that of its exports. |
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Term
| Balance of payments is... |
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Definition
| The difference between money coming into a country (from exports) and money leaving the country (for imports) plus money flows from other factors such as tourism, foreign aid, military expenditures, and foreign investment. |
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Term
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Definition
| A global strategy in which a firm (the licensor) allows a foreign company (the licensee) to produce its product in exchange for a fee (a royalty). |
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Term
| Contract manufacturing is... |
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Definition
| A foreign country's production of private-label goods to which a domestic company then attaches its brand name or trademark. |
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Term
| Contract manufacturing is also known as... |
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Definition
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Term
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Definition
| A partnership in which two or more companies (often from different countries) join to undertake a major project or to form a new company. |
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Term
| A strategic alliance is... |
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Definition
| A long-term partnership between two or more companies established to help each company build competitive market advantages. |
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Term
| Foreign direct investment is... |
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Definition
| The buying of a permanent property and businesses in foreign nations. |
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Term
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Definition
| A company owned in a foreign country by another company known as the parent company. |
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Term
| A multinational corporation is... |
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Definition
| An organization that manufactures and markets products in many different countries and has multinational stock ownership and multinational management. |
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Term
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Definition
| The set of values, beliefs, rules, and institutions held by a specific group of people. |
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Term
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Definition
| An attitude that one's own culture is superior to all others. |
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Term
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Definition
| The value of one nation's currency relative to the currencies of other countries. |
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Term
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Definition
| Lowering the value of a nation's currency relative to other currencies. |
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Term
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Definition
| A complex form of bartering in which several countries may be involved, each trading goods for goods or services for services. |
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Term
| Trade protectionism is... |
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Definition
| The use of government regulations to limit the import of goods and services. |
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Term
| Advocates of trade protectionism believe that it... |
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Definition
| Allows domestic producers to survive and grow, producing more jobs. |
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Term
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Definition
| Selling products in a foreign country at lower prices than those charged in the producing country. |
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Term
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Definition
| A tax imposed on imports or foreign products. |
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Term
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Definition
| A limit on the number of products in certain categories that a nation can import. |
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Term
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Definition
| A complete ban on the import or export of a certain product. |
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Term
| The General Agreement on Tariffs and Trade (GATT) is... |
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Definition
| A 1948 agreement that established an international forum for negotiating mutual reductions in trade restrictions. |
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Term
| The World Trade Organization (WTO) is... |
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Definition
| The international organization that replaced the General Agreement on Tariffs and Trade, and was assigned the duty to mediate trade disputes among nations. |
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Term
| The International Monetary Fund (IMF) is... |
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Definition
| An international bank that makes short-term loans to countries experiencing problems with their balance of trade. |
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Term
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Definition
| An autonomous United Nations agency that borrows money from the more prosperous countries and lends it to less-developed countries to develop their infrastructure. |
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Term
| Producers' cartels are... |
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Definition
| Organizations of commodity-producing countries that are formed to stabilize or increase prices to optimize overall profits in the long run. |
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Term
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Definition
| A regional group of countries that have a common external tariff, no internal tariffs, and a coordination of laws to facilitate exchange; also called a trading bloc. |
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Term
| The North American Free Trade Agreement (NAFTA) is... |
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Definition
| An agreement that created a free-trade area among Canada, the United States, and Mexico. |
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Term
| Nations should trade with other nations because... |
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Definition
1) No country is self-sufficient
2) Other countries need products that prosperous countries produce
3) Natural resources and technological skills are not distributed evenly around the world. |
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Term
| What are a couple of examples of a common market? |
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Definition
1) The North American Free Trade Agreement (NAFTA)
2) The European Union (EU) |
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Term
| What are some ways in which a company can get involved in global business or world trade? |
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Definition
1) Exporting
2) Licensing
3) Franchising
4) Contract manufacturing
5) Joint ventures and Strategic alliances
6) Direct foreign investment |
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Term
| How do multinational corporations differ from other companies that participate in global business? |
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Definition
| Unlike other companies that are involved in exporting or importing, multinational corporations also have manufacturing facilities or some other type of physical presence in different nations. |
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Term
| Offshore outsourcing is... |
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Definition
| The purchase of goods and services from outside a firm rather than providing them inside the company. |
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Term
| Offshore outsourcing a major concern for the future because... |
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Definition
| It has been a large part of business for many years and today more businesses are outsourcing manufacturing and services offshore (globally). Because of this many fear that growing numbers of jobs in Canada will be lost. |
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Term
| What are the types of tariff barriers? |
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Definition
1) Protective tariffs
2) Revenue tariffs |
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Term
| What are revenue tariffs used for? |
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Definition
| To raise money for the government. |
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Term
| What are protective tariffs used for? |
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Definition
| To raise the price of foreign products. |
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Term
| Non-tariff barriers include... |
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Definition
| Safety, health, and labeling standards. |
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Term
| What kinds of products can be imported and exported? |
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Definition
| Just about any kind of product can be imported and exported. Companies can sometimes fund surprising ways to succeed in either activity. Selling in global markets is not necessarily easy though. |
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Term
| The four forces affecting trade are... |
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Definition
1) Sociocultural forces (e.g., religion)
2) Economic forces (e.g., disposable income)
3) Legal and Reulatory forces (e.g., law on bribery)
4) Technological forces (e.g., Internet usage) |
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Term
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Definition
| The main driving force behind international finance and trade. It involves the buying or selling of goods and services in all countries of the world, or the value of goods and services sold. |
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Term
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Definition
| All of the following are recognized as being potential hurdles to be overcome in global trading, EXCEPT... |
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Term
| Absolute advantage occurs for a country when... |
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Definition
| When it has a monopoly on product a product. |
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Term
| Imports exceeds the value of exports. |
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Definition
| An unfavourable balance of trade occurs when the value of... |
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Term
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Definition
| The difference between money coming into and leaving the country plus money flows from factors such as tourism and foreign aid is referred to as the... |
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Term
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Definition
| The fee paid to a firm in a licensing agreement that gives another firm the right to manufacture their product or use its trademark is called... |
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Term
| Has a balance of trade deficit. |
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Definition
| The value of goods imported into France exceeds the value of French exports. This indicates that France... |
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Term
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Definition
| The United States has stopped some Canadian goods from entering the country because it said that the information on the labels was too small. This is an example of a(n)... |
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Term
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Definition
| Ford trades vehicles to Jamaica, which then trades them to China in exchange for computers. This is an example of... |
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Term
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Definition
| A Mexican firm has agreed to trade petroleum to an American importer in return for Canadian made computers. This arrangement is an example of... |
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Term
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Definition
| Companies such as McDonald's, Pizza Hut, and KFC, have entered the global market by offering investors the opportunity to set up... |
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Term
| Floating exchange rate is... |
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Definition
| Currencies float according to supply and demand for them and the global market. |
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Term
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Definition
| The market is created by... |
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Term
| Global currency traders... |
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Definition
| Value currencies based on how strong the current currency of the country is. |
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Term
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Definition
| What is a problem with international law and business? |
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Term
| They review their global operations frequently. |
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Definition
| How do companies ensure that they operate at a profit in the global market? |
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Term
| Trade is so important because... |
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Definition
| It enhances the life of the average Canadian and it boosts the economy. |
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Term
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Definition
| Which industry is critical to the Canadian economy? |
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Term
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Definition
| Which one of Canada's industries is shrinking? |
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Term
| Low wages and financial incentives. |
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Definition
| Why is the Canadian assembly industry shrinking? |
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Term
| Export trading companies. |
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Definition
| Who can help Canadian firms establish foreign trading relationships? |
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Term
| Organizations can access a new market. |
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Definition
| A major benefit of licensing is that... |
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Term
| If relations with the host company falter, the foreign government can take over the assets of the firm in their country. |
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Definition
| What is a problem with foreign direct investment? |
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Term
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Definition
| What is the historical term for economics? |
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Term
| A region with no barriers between them. |
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Definition
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