Economic Systems
A set of social rules used to deal with the production, distribution, and consumption of goods and services.
What is an Economic System?
Buying, selling, trading of goods and services across national barriers.
What is the role of international business?
The sale of goods and services to foreign markets.
What is exporting?
A tax levied by a nation on goods imported or exported.
What are tariffs?
Originally signed by 23 nations in 1947, this agreement provided a forum for tariff negotiations and a place where international trade problems could be discussed/resolved.
What is GATT (General Agreement on Tariffs and Trade)?
Communism, Socialism, Capitalism, Mixed economies
What are the four types of economic systems?
Exists when a country is the only source of an item, only producer, or the most efficient producer.
What is absolute advantage?
The purchase of goods and services from foreign sources.
What is importing?
This type of trade barrier includes differences in spoken and written languages.
What are Cultural Barriers?
International organization dealing with the rules of trade between nations; created in 1995 to replace GATT.
What is the World Trade Organization (WTO)?
Economic system characterized by government ownership of major industries but allows individuals to own small businesses.
What is Socialism?
Exists when a country specializes in products that it can supply more efficiently or at a lower price.
What is comparative advantage?
The difference in value between a nation’s exports and its imports.
What is balance of trade?
Limits the number of units of a particular product that can be imported into a country.
What is a quota?
Agreement (1994) that eliminated most tariffs and trade restrictions on agricultural and manufactured products to encourage trade among Canada, US, and Mexico.
What is NAFTA?
An economic system where consumers have limited options and little career choice.
What is Communism?
Transferring manufacturing and other tasks to countries where labor and supplies are less expensive.
What is Outsourcing?
A nation’s positive balance of trade (country exports more than imports).
What is a trade surplus?
A barrier that businesses must consider when setting up operations in foreign countries. Unlike legal issues, these barriers are seldom written down and often change rapidly.
What are political barriers?
Agreement that eliminated most tariffs and trade restrictions to encourage trade among US, Mexico, and Canada; Replaced NAFTA.
What is CUSMA (Canada-United States-Mexico Agreement)?
Two forms of capitalism.
What is pure capitalism and modified capitalism?
A strategy that involves standardizing products for the whole world, as if it were a single entity.
What is global strategy (globalization)?
A nation’s negative balance of trade (country imports more than exports).
What is trade deficit?
A group of firms or nations that agree to act as a monopoly.
What is a cartel?
Canada's fifth largest export market and third largest import market.
What is Mexico?