International Business

International Business:

All business activities that involve exchanges across national boundaries.

Absolute Advantage:

The ability to produce a specific product more efficiently than any other nation.

Comparative Advantage:

The ability to produce a specific product more efficiently than any other products.

Exporting:

Selling and shipping raw materials or products to other nations.

Importing:

Purchasing raw materials or products in other nations and bringing them into one's own country.

Balance of Trade:

The total value of a nation's exports less the total value of its imports, over some period of time.

Trade Deficit:

An unfavorable balance of trade.

Balance of Payments:

The total flow of money into the country less the total flow of money out of the country, over some period of time.

Import Duty: (or tariff)

A tax that is levied on a particular foreign product entering a country.

Dumping:

Exportation of large quantities of a product at a price lower than that of the same product in the home market.

Nontariff Barrier:

A nontax measure imposed by a government to favor domestic over foreign suppliers.

Import Quota:

A limit on the amount of a particular good that may be imported into a country during a given period of time.

Embargo:

A complete halt to trading with a particular nation or in a particular product.

Foreign&-Exchange Control:

A restriction on the amount of a particular foreign currency that can be purchased or sold.

Currency Devaluation:

The reduction of the value of a nation's currency relative to the currencies of other countries.

General Agreement on Tariffs and Trade: (GATT)

An international organization whose goal is to reduce or eliminate tariffs and other barriers to world trade.

Economic Community:

An organization of nations formed to promote the free movement of resources and products among its members and to create common economic polices.

Licensing:

A contractual agreement in which one firm permits another to produce and market its product and use its brand name in return for a royalty or other compensation.

Multinational Enterprise:

A firm that operates on a worldwide scale, without ties to any specific nation or region.

Export&-Import Bank of the United States:

An independent agency of the U.S. government whose function is to assist in financing the exports of American firms.

Multilateral Development Bank: (MDB)

An internationally supported bank that provides loans to developing countries to help them grow.

International Monetary Fund: (IMF)

An international bank that makes short&-term loans to countries experiencing balance&-of&-payment deficits.