International Business Basics
True or False. Absolute advantage happens when a country produces goods and services at a higher cost than other countries.
False. When they produce at a lower cost.
Define Exchange Rate
What are the three key things that affect a country's level of economic development?
Literacy level, technology, agricultural dependency
What is a multi-national company?
An organization that does business in several countries
What are the two strategies that multinational companies use?
Global and multinational strategies
Comparative Advantage is a situation in which a country specializes in the ___________ of a good or service at which it is relatively more efficient.
Production
refers to a nation's transportation, communication and utility systems.
What are the four main elements of the international business environment.
Geography, economics, culture, political/legal factors
Define joint venture
an agreement between two or more companies to share a business project.
What are the three global market entry modes
Licensing, franchising and joint venture
Define Imports
Items bought from other countries
Define Quota
a set limit on the quantity of a product that may be imported within a given period.
What are the two types of trade barriers?
Formal and informal
What does WTO stand for?
World Trade Organization
What is the main purpose of the World Bank?
Define exports
Goods and services sold to other countries
Define tariff
a tax that the government places on certain imported products.
What are three things international governments can do to promote international business?
Free-trade zones, Free-trade agreements, and Common Markets
What does IMF stand for?
International Monetary Fund
What are the three factors that affect currency values?
Balance of payments, economic conditions and political stability
What is Mrs. Dunham's favorite color
Black
Do you remember what GDP stands for?
Gross Domestic Product