GEB: Chap 4

• Nations trade to provide markets for their products and access to needed resources
• Boeing selling jetliners in Asia would be considered exports in the United States
• The computers that U.S. manufacturers sell in Canada are called exports
• For centuries, China has enjoyed an absolute advantage in silk production
• Less developed countries' share of the world’s population will increase in the coming years
• According to the U.S. Census Bureau, compared to 35 years ago, the global birth rate is decreasing significantly
• The top five nations that the U.S. trades with are China, Canada, Mexico, Japan, Germany
• The difference between a nation’s imports and its exports is called the balance of trade
• A country has a absolute advantage in making a product for which it can maintain a monopoly or that it can produce at a lower cost than any competitor
• A balance-of-payments surplus means that more money has moved into a country than out of it
• Exchange rate changes can create a competitive advantage
• Devaluation occurs when there is a drop in a currency’s value relative to other currencies or a fixed standard
• Per-capita income is NOT a social or cultural barrier to international trade
• The most widely spoken language in the world is Mandarin Chinese
• The Foreign Corrupt Practices Act forbids U.S. companies from bribing foreign officials, political candidates, or government representatives
• An embargo imposes a total ban on importing a specified product
• Taxes, surcharges, or duties on foreign products are referred to as tariffs
• Trade restrictions create legal and political barriers to international trade
• The World Trade Organization monitors GATT agreements
• The General Agreement on Tariffs and Trade (GATT) has substantially reduced worldwide tariffs and other trade barriers
• NAFTA benefits Canada, the United States, and Mexico by allowing the three nations to trade without tariffs or other trade barriers
• The International Monetary Fund was created to promote trade through financial cooperation and in the process, eliminate barriers
• The growth in offshoring has resulted in a loss of jobs in the U.S.
• Exporting or importing typically has the least amount of risk in international involvement
• One example of a free-trade area is the North American Free Trade Agreement enacted by the United States, Canada, and Mexico
• A foreign licensing agreement allows one company to produce and sell another company’s product overseas
• Joint ventures allow companies to partner and share risks, costs, profits, and management responsibility with host-country nationals
• A multi domestic business strategy involves developing and marketing products to serve different needs and tastes of separate national markets
• A global business strategy involves offering standardized, worldwide products and selling them in essentially the same manner throughout the world