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38 True/False questions

  1. Trade DeficitWhen a country sells more products than it buys

          

  2. International Licensing AgreementAllows a foreign company (licensee) to sell the products of a producer (licensor) or to use its intellectual property (such as patents, trademarks, copyrights) in exchange for royalty fees

          

  3. Absolute AdvantageLimit the quantity of goods that may enter the commerce of the United States in a specific period. When filled, further entries are prohibited during the remainder of the quota period

          

  4. OffshoringPractice of using outside vendors to manufacture all or part of a company's products

          

  5. World Trade Organization (WTO)Association of European countries that joined together to eliminate trade barriers among themselves

          

  6. Trade SurplusGovernment policies that restrict free trade

          

  7. OutsourcingPractice of using outside vendors to manufacture all or part of a company's products

          

  8. North American Free Trade Association (NAFTA)Agreement among governments of the U.S., Canada, and Mexico to open their borders to unrestricted trade

          

  9. World Bank-International financial institution that provides economic assistance to poor and developing countries
    -Loans are made to help countries improve the lives of the poor through community-support programs designed to provide health, nutrition, education, infrastructure, and other social services

          

  10. ProtectionismUse of trade controls to reduce foreign competition in order to protect domestic industries

          

  11. Balance of PaymentsDifference between value of a nation's imports and its exports during a specified period

          

  12. Foreign Corrupt Practices ActProhibits distribution of bribes and other favors in the conduct of business

          

  13. General Agreement on Tariffs and Trade (GATT)International organization that monitors trade policies and whose members work together to enforce rules of trade and resolve trade disputes

          

  14. Balance of TradeDifference between value of a nation's imports and its exports during a specified period

          

  15. DumpingBuying products overseas and reselling them in one's own country

          

  16. Opportunity CostThe products that a country must decline to make in order to produce something else

          

  17. ExportingSelling domestic products to foreign customers

          

  18. International Monetary Fund (IMF)-Agreement in which a domestic company (franchiser) gives a foreign company (franchisee) the right to use its brand and sell its products
    -The franchisee is responsible for all operations but agrees to operate according to a business model established by the franchiser
    -In turn, the franchisor usually provides advertising, training, and new-product assistance

          

  19. SubsidiesGovernment payments given to certain industries to help offset some of their costs of production

          

  20. Foreign Subsidiary-An independent company owned by a foreign firm
    -This approach to going international not only gives the parent company full access to local markets but also exempts it from any laws or regulations that may hamper the activities of foreign firms
    -Parent company has tight control over the operations of a subsidiary, but while senior managers from the parent company often oversee operations, many managers and employees are citizens of the host country

          

  21. Low-Context CulturesCultures in which personal and family connections have an effect on most interactions, including those in business

          

  22. TariffsGovernment payments given to certain industries to help offset some of their costs of production

          

  23. Joint VenturesAlliances in which the partners fund a separate entity (maybe a partnership or corporation) to manage their joint operation

          

  24. International Contract Manufacturing-Agreement in which a domestic company (franchiser) gives a foreign company (franchisee) the right to use its brand and sell its products
    -The franchisee is responsible for all operations but agrees to operate according to a business model established by the franchiser
    -In turn, the franchisor usually provides advertising, training, and new-product assistance

          

  25. Tariff-Rate QuotaLimit the quantity of goods that may enter the commerce of the United States in a specific period. When filled, further entries are prohibited during the remainder of the quota period

          

  26. Trading BlocsWhen a country sells more products than it buys

          

  27. Absolute QuotaCondition whereby a company is the only source of a product or is able to make more of a product using the same amount of or fewer resources than other countries

          

  28. Trade ControlsWhen a country sells more products than it buys

          

  29. Exchange RateValue of one currency relative to another

          

  30. Strategic AllianceWhen a country buys more products than it sells

          

  31. ImportingSelling domestic products to foreign customers

          

  32. Multinational Corporation (MNC)-International organization set up to loan money to countries with troubled economies
    -In exchange for relief in times of financial crisis, borrower countries must institute sometimes painful financial and economic reforms

          

  33. European Union (EU)Association of European countries that joined together to eliminate trade barriers among themselves

          

  34. Foreign Direct Investment (FDI)Prohibits distribution of bribes and other favors in the conduct of business

          

  35. Comparative AdvantageCondition whereby one nation is able to produce a product at a lower opportunity cost compared to another nation

          

  36. International FranchiseAgreement between 2 companies to pool resources in order to achieve business goals that benefit both partners

          

  37. High-Context CulturesCultures in which personal and family connections have an effect on most interactions, including those in business

          

  38. Quota-Government imposed restrictions on the quantity of a good that can be imported over a period of time
    -Used to protect specific industries, usually new ones or those facing strong competitive pressure from foreign firms