Balance of Payments
The difference between total exports and total imports.
What is the balance of trade?
The event that removed the separation between Eastern and Western Germany, and encouraged the development of free enterprise in all of Europe.
What is the Fall of the Berlin Wall?
A tax on imported goods.
What is a tariff?
Firms utilize this so they can reach additional consumers in other countries.
What is Foreign Direct Investment?
Measures the flow of funds between countries that are due to direct foreign investment, portfolio investment, and capital investment.
What is the financial account?
This pact eliminated trade barriers between countries on the North American continent.
What is the USMCA?
A maximum limit of what can be imported.
What is a quota?
Engaging in the sale of some government operations to corporations and other investors.
What is privatization?
The third main component of the current account which represents aid, grants, and gifts from one country to another.
What is Secondary Income/Transfer Payments?
The political and economic union of member states located primarily in Europe, fostering the free movement of products and services between member countries.
What is the European Union?
Cost of labor, inflation, national income, credit conditions, government policies, and exchange rates.
What are the most influential factors affecting international trade flows?
Often used in the United States to build manufacturing plants, offices, and other buildings.
What is foreign investment?
Has held a consistently negative balance since 1992.
What is the U.S. current account?
The process of subcontracting to a third party.
What is outsourcing?
A pattern illustrating a trade balance's continued decline before an eventual reversal due to limited agreement adjustability.
What is the J-curve effect?
Changes in restrictions, privatization, potential economic growth, tax rates, and exchange rates.
What are the factors affecting Direct Foreign Investment?
The net flow of funds due to financial asset transactions between individual or institutional investors.
What do portfolio investment and other capital investments measure?
Two countries that contribute to a significant portion of the U.S. trade deficit.
What are China and Japan?
During these times MNCs may have to reduce their corporate spending, which weakens the economy, and reduces demand for imported supplies.
What happens when credit conditions become more restrictive?
Countries that lower these rates are more attractive for FDI.
What are tax rates?