Business Ch. 3 Vocabulary

Glossary

Chapter 3 Absolute a situation where a country can produce a good or service at a lower cost than other countries. advantage Balance of the difference between the amount of money that comes into a country and the amount that goes payments out of a country. Balance of the difference between a country's total exports and total imports. trade Common a market in which members do away with duties and other trade barriers. market Comparative a situation in which a country specializes in the production of a good or service at which it is advantage relatively more efficient. Culture the accepted behaviors, customs, and values of a society. Domestic the making, buying, and selling of goods and services within a country. business Embargo an action imposed by the government to stop the export or import of a product completely. Exchange rate the value of a currency in one country compared with the value in another. Exports goods and services sold to other countries. Foreign debt the amount a country owes to other countries. Foreign exchange banks that buy and sell different currencies. market Franchise a written contract granting permission to operate a business to sell products and services in a set way. Free-trade an agreement between member countries to remove duties and trade barriers on products traded agreement among them. Free-trade a selected area where products can be imported duty-free and then stored, assembled, and/or used zone in manufacturing. Global a strategy that uses the same product and marketing strategy worldwide. strategy Host country the country in which the multinational company (MNC) places business activities. Imports goods and services bought from other countries. Infrastructure a factor that supports international trade in industrialized countries, including a nation's transportation, communication, and utility systems. Interest rates the cost of using someone else's money. International business activities needed for creating, shipping, and selling goods and services across national business borders. Joint venture a unique business organized by two or more other businesses to operate for a limited time and for a specific project. It is a type of partnership. Licensing selling the right to use some intangible property (production process, trademark, or brand name) for a fee or royalty. Multinational an organization that does business in several countries. It usually consists of a home country and company divisions or separate companies in one or more host countries. (MNC) Multinational a strategy that treats each country market differently. Firms develop products and marketing strategy strategies that adapt to the customs, tastes, and buying habits of a distinct national market. Negative or unfavorable the result of a country sending more money out than it brings in. balance of payments Positive or favorable occurs when a nation receives more money in a year than it pays out. balance of payments Quota a government-set limit on the quantity of a product that may be imported or exported within a given period. Tariff a tax that a government places on certain imported products. Trade barriers restrictions to free trade. Trade deficit a situation in which a country imports (buys) more than it exports (sells). Trade surplus a situation in which a country exports (sells) more than it imports (buys).