Key Terms
Buying products from another country:
Importing
______ is selling products to a different country.
Exporting
A contractual agreement whereby someone with a good idea for a business sells others the rights to use the name and sell a product/service in a given area:
Franchising
1%
The movement of goods and services among nations without political or economic barriers:
Free trade
When a country has a monopoly on producing a specific product or is able to produce it more efficiently than all other countries, it has a ________
Absolute advantage
When a country should sell the products it produces most efficiently and buy from other countries the products it cannot produce as efficiently:
Comparative advantage
Which country is the second largest exporting nation in the world?
U.S.
Taxes on imports, making imported goods more expensive.
Tariffs
Trade _____ is when the value of a country’s exports is less than that of its imports.
deficit
The difference between money coming into a country (from exports) and money leaving the country (from imports) plus other money flows is the balance of ______.
payments
Which country is the largest importing nation in the world?
U.S.
When the value of a country’s exports is more than that of its imports:
Trade surplus
A ______ _______ occurs when 2 or more companies join to undertake a major project.
Joint venture
When a firm provides the right to manufacture its product or use its trademark to a foreign company for a fee:
Licensing
Selling products in a foreign country at lower prices than those charged in the producing country:
Dumping
The total value of a nation’s exports compared to its imports measured over a particular period:
Balance of trade
_____ occurs when a firm contracts with other companies to do some or all of its functions.
Outsourcing
A complete ban of an import or export within a certain country:
Embargo
The value of one nation's currency relative to the currency of other nations:
Exchange rate