INTERNATIONAL BUS. & TRADE PDF

16. Fixed Exchange Rate - an exchange rate set by 50 Basic Concepts of Global Trade a government or central bank. Core Concepts 17. International Monetary Fund (IMF) - an...

16. Fixed Exchange Rate - an exchange rate set by 50 Basic Concepts of Global Trade a government or central bank. Core Concepts 17. International Monetary Fund (IMF) - an international organization that promotes international monetary cooperation, exchange rate stability, and the expansion of international 1. Absolute Advantage - the ability of a country to trade. produce a good or service more efficiently than another country. 18. World Trade Organization (WTO) - an international organization that oversees trade 2. Comparative Advantage - the ability of a country agreements and settles trade disputes. to produce a good or service at a lower opportunity cost than another country. Trade Agreements 3. Opportunity Cost - the value of the next best 19. General Agreement on Tariffs and Trade (GATT) alternative that must be given up to obtain - a multilateral agreement that aimed to reduce something. trade barriers. 4. Specialization - focusing on producing goods or 20. North American Free Trade Agreement (NAFTA) services in which a country has a comparative - a trade agreement between the United States, advantage. Canada, and Mexico. 5. Free Trade - the absence of government 21. European Union (EU) - a political and economic restrictions on the import or export of goods and union of 27 member states located in Europe. services. 22. Association of Southeast Asian Nations 6. Protectionism - government policies that restrict (ASEAN) - a political, economic, and cultural trade, such as tariffs, quotas, and subsidies. organization of 10 Southeast Asian countries. 7. Tariff - a tax imposed on imported goods. 23. Regional Trade Agreements - trade agreements between countries in a specific region. 8. Quota - a limit on the quantity of a good that can be imported or exported. Trade Theories 9. Subsidy - a government payment to producers 24. Mercantilism - an economic theory that holds of a good or service. that a country's wealth is measured by its gold and silver reserves. 10. Balance of Trade - the difference between a country's exports and imports. 25. Classical Theory of Trade - a theory that emphasizes the role of comparative advantage 11. Balance of Payments - the record of all in determining international trade patterns. economic transactions between a country and the rest of the world. 26. Heckscher-Ohlin Theory - a theory that explains international trade based on a country's relative 12. Exchange Rate - the price of one country's abundance of factors of production. currency in terms of another country's currency. 27. New Trade Theory - a theory that emphasizes 13. Appreciation - an increase in the value of a the role of economies of scale and increasing currency relative to other currencies. returns to scale in determining international trade patterns. 14. Depreciation - a decrease in the value of a currency relative to other currencies. Trade Issues 15. Floating Exchange Rate - an exchange rate 28. Dumping - the practice of selling goods in a determined by market forces. foreign market at a price below their cost of production. 29. Intellectual Property Rights - legal rights that 5. Incoterms - a set of internationally recognized protect inventions, artistic works, and other rules that define the responsibilities of buyers intangible assets. and sellers in international trade. 30. Trade Barriers - government policies that restrict Trade Policies trade, such as tariffs, quotas, and subsidies. 6. Most Favored Nation (MFN) Clause - a clause in 31. Trade Disputes - conflicts between countries a trade agreement that requires a country to over trade policies. treat all trading partners equally. 32. Fair Trade - a social movement that promotes 7. National Treatment - a principle that requires a fair wages and working conditions for producers country to treat foreign products and services in in developing countries. the same way as domestic products and services. Importance of Global Trade 8. Anti-Dumping Duties - duties imposed on 33. Economic Growth -global trade can promote imported goods that are sold below their fair economic growth by increasing access to market value. markets and expanding export opportunities. 9. Countervailing Duties - duties imposed on 34. Job Creation - global trade can create jobs in imported goods to offset subsidies provided to sectors such as manufacturing, transportation, foreign producers. and services. 10. Safeguard Measures - temporary measures 35. Lower Prices - global trade can lower prices for taken to protect domestic industries from injury consumers by increasing competition. caused by increased imports. 36. Innovation - global trade can encourage International Trade Organizations innovation by exposing countries to new ideas and technologies. 11. World Trade Organization (WTO) - An international organization that oversees trade 37. Cultural Exchange - global trade can promote agreements and settles trade disputes. cultural exchange and understanding between different countries. 12. International Monetary Fund (IMF) - an international organization that promotes international monetary cooperation, exchange rate stability, and the expansion of international 50 More Basic Concepts of Global Trade trade. Trade Finance 13. World Bank - an international financial institution that provides loans and grants to developing 1. Letter of Credit - a document issued by a bank countries. that guarantees payment to a seller if certain conditions are met. 14. United Nations Conference on Trade and Development (UNCTAD) - a United Nations 2. Documentary Credit - a type of letter of credit agency that deals with trade and development that requires the seller to present specific issues. documents to the bank to receive payment. 15. Group of Seven (G7) - a group of seven leading 3. Bill of Lading - a document issued by a carrier industrialized nations. that serves as a receipt for goods and a contract of carriage. Trade and Development 4. Invoice - a document that lists the goods or 16. Developing Countries - countries with low or services sold, the quantity, price, and terms of middle levels of economic development. payment. 17. Developed Countries - countries with high levels of economic development. 18. Structural Adjustment Programs (SAPs) - Why: Many developed nations are experiencing a economic reforms imposed on developing rapid increase in their elderly populations. This countries by the IMF and World Bank. demographic shift has significant implications for 19. Foreign Direct Investment (FDI) - investments healthcare systems, social security programs, and made by a company in a foreign country. consumer behavior. 20. Trade Liberalization - the process of reducing Impact: Increased demand for healthcare services, trade barriers. retirement products, and age-friendly Trade and Environment technologies. 2. Geopolitical Tensions and Conflicts: 21. Environmental Protectionism - government Why: Ongoing geopolitical rivalries, trade disputes, policies that protect the environment. and regional conflicts can disrupt global supply 22. Eco-labeling - the practice of labeling products chains, increase market volatility, and deter foreign to indicate that they are environmentally friendly. investment. 23. Carbon Tariffs - taxes imposed on imported Impact: Economic uncertainty, inflation, and goods based on their carbon footprint. potential disruptions in trade and production. 24. Sustainable Trade - trade that is environmentally 3. Technological Advancements: sustainable and socially responsible. Why: Rapid advancements in technology, such as Trade and Technology artificial intelligence, automation, and biotechnology, are transforming industries and 25. Digital Trade - the trade of digital products and creating new market opportunities. services. Impact: Job displacement, increased productivity, 26. E-commerce - the buying and selling of goods and the emergence of new business models. and services over the internet. 4. Climate Change and Sustainability: 27. Intellectual Property Rights (IPRs) - legal rights Why: The growing concern about climate change that protect inventions, artistic works, and other and the need for sustainable practices is driving intangible assets. changes in consumer preferences, government 28. Technology Transfer - the process of transferring regulations, and corporate behavior. technology from one country to another. Impact: Increased demand for environmentally Trade and Culture friendly products and services, and the potential for significant regulatory and financial risks. 29. Cultural Globalization - the spread of cultural influences around the world. 5. Economic Inequality and Social Unrest: Why: Rising income inequality and social 30. Cultural Imperialism - the imposition of one culture on another. disparities can lead to increased social unrest, political instability, and consumer spending 31. Cultural Sensitivity - understanding and patterns. respecting the cultural differences of others. Impact: Economic uncertainty, potential disruptions 32. Cultural Appropriation - the adoption of elements in supply chains, and increased regulatory of one culture by members of another culture. burdens. 5 Global Market Trends and Issues 1. Aging Population: