International Business Key Terms

Study Notes

International Business Key Terms

International Transactions: Business activities involving goods and services exchanged across international borders.
Domestic Transactions: Business activities occurring within a country's borders.
Foreign Trade: Exchange of goods and services between countries.
Balance of Trade: Difference between a country's exports and imports.
Imports: Goods and services bought from foreign countries.
Exports: Goods and services sold to foreign countries.
Trade Surplus: Exports exceed imports.
Trade Deficit: Imports exceed exports.
Direct Exporting: Selling directly to foreign markets.
Indirect Exporting: Using intermediaries (agents/distributors) for international sales.
Currency/Exchange Rate: Value of one currency relative to another, impacting international trade.
Tariffs: Taxes on imported goods, increasing their price to protect domestic industries.
Excise Tax: Tax on goods produced/sold domestically.
Non-Tariff Barriers: Trade restrictions other than tariffs (e.g., quotas, standards).
Global Product: A product marketed similarly across various countries.
Global Economy: Interconnected economies of the world.
Social Costs: Costs affecting society as a whole, not just individual businesses (e.g., pollution).
Offshore Outsourcing: Relocating business functions (manufacturing, services) to a foreign country.
Transnational Companies: Businesses operating globally, integrating operations across countries.
International Labour Organization (ILO): UN agency setting standards and promoting social justice in labor.
Sustainable Development: Economic growth without depleting natural resources.
Environmental Degradation: Deterioration of the environment through resource depletion, ecosystem damage, and pollution.
Landed Cost: Total product price including shipping, taxes, and tariffs at buyer doorstep.
Trade Agreement: Treaty between two or more countries establishing trade relations.
GATT (General Agreement on Tariffs and Trade): International treaty reducing trade barriers.
WTO (World Trade Organization): Intergovernmental body regulating international trade.
NAFTA (North American Free Trade Agreement): Trade agreement between USA, Canada, and Mexico eliminating trade barriers.
Bilateral Agreement: Trade agreement between two countries.
Regional Trade Agreement: Agreement among countries in a region to boost trade.
Trading Bloc: Group of countries in a trade agreement.
G8: Group of eight major economies (Canada, France, Germany, Italy, Japan, Russia, UK, USA) coordinating economic policy.
Global Dependency: Reliance of countries on each other for goods, services, and markets.

International Business Key Concepts

Five P's of International Business:
- Product: Goods/services offered.
- Price: Consumer cost.
- Promotion: Marketing strategies.
- Place: Distribution channels.
- People: Employees and consumers involved.
Five Benefits of International Trade:
- Larger market access.
- Diversified supply sources.
- Economies of scale.
- Enhanced competitiveness.
- Increased innovation.
USA as Canada's Major Trading Partner:
- Geographical proximity.
- Economic ties and shared values.
- NAFTA agreements.
Reasons for Reducing Trade Barriers:
- Encourage free trade and growth.
- Improve consumer choice.
- Foster international relations.
- Enhance competition and efficiency.
Ethical Problems with Offshore Outsourcing:
- Labor exploitation in developing countries.
- Job losses in home countries.
- Concerns about working conditions.
- Environmental impact.
Characteristics of Trade Agreements:
- Reducing tariffs and quotas.
- Establishing trade relationship guidelines.
- Providing dispute resolution mechanisms.
- Protecting intellectual property.
NAFTA Benefits & Concerns:
- Benefits: Lower prices, increased exports, economic growth.
- Concerns: Job losses, environmental degradation, labor exploitation.
G8 – Countries and Purpose: (see above list of G8 countries) - Coordinate economic policy.
Cultural Factors in International Business: Understanding and respecting local customs, languages, and business practices is crucial; this also involves awareness of legal and regulatory environments.

Description

Test your knowledge on essential international business terminology. This quiz covers key concepts such as international transactions, trade balance, and foreign trade practices. Understand the fundamental terms that drive global commerce.