Vocab 1
Authority of one or more member countries is significantly reduced and a common, united government is put in place
Political Union
Monetary and fiscal policies between member countries are coordinated by political integration
Economic Union
Goods or services brought into one country from another
Imports
foreign goods and services are shipped into another country and received by a distributor, then sold to the consumer
Indirect Importing
Foreign goods and services are shipped into another country and received by the consumer without going through a middle man
Direct Imports
Goods or services which are produced in one country and are shipped to another country for sale or trade
Exports
Goods are exported from a company through a third party company
Indirect Exporting
Member countries are free to move factors of production within other member countries
Common Market
Tariffs between member countries are predetermined and applied to other countries
Custom Union
Difference between a country’s imports and exports
Balance of Trade
Amount charged by a lender to a borrower for the use of their money
Interest Rate
When a country is spending more on foreign trade than it is earning
Deficit
Debt owed by a government
Public Debt
Export prices versus import prices
Terms of Trade
Investors look to support stable countries with strong economic performance
Political Stability
Company or manufacturer is more involved with the exporting process
Direct Exporting
Economic transactions between countries or other foreign entities
Foreign Trade
Business which operates internationally
Global Business
When a business creates the efficient production of a specific product or service
Specialization
Rate at which the level of prices for goods and services are rising and purchasing is falling
Inflation
Different countries or regions agree to reduce or eliminate trade barriers and coordinate monetary and fiscal policies
Economic Integration
When a company sells goods and services at a lower price than its competitors and still gains larger profits
Comparative Advantage
Investor purchases part of a company through stocks; no real control of company
Portfolio Investment
Investor purchases large part of a company; has direct control of company
Direct Investment
Exchange of one currency for another; conversion of one currency into another
Foreign Exchange