Name________________________________
Business in the Global Economy
Chapter 3
3-1 International Business Basics
___________________ ___________________ is the making, buying, and selling of goods and services
within a country.
____________________ ___________________ refers to business activities needed for creating,
shipping, and selling goods and services across national borders.
Absolute advantageSaudi Arabia has an absolute advantage in _____________.
__________________ __________________ when a country specializes in the production of a good or
service at which it is more efficient.
ImportsExamples:1.
2.
ExportsExamples:1.
2.
How many U.S. jobs depend on international business?
__________________ ____________ is the amount a country owes to other countries.
The difference between a country’s total exports and total imports is called the __________________ of
__________________.
If a country ____________ more than it _______________, it has a trade surplus and its trade position is
said to be favorable.
If a country ____________ more than it _______________, it has a trade deficit and its trade position is
unfavorable.
What balance of trade does the United States have?
Balance of PaymentsA positive or __________________ balance of payments occurs when a nation receives more money in
year than it pays out.
A negative or ________________________ balance of payments occurs when a country sends more
money out than it brings in.
Other forms of exchange between countries:
1.
2.
3.
Foreign exchange marketThe __________________ ______________ is the value of a currency in one country compared with
the value in another.
_______________ and _______________ affect the value of currency.
3 factors affecting currency values:
1.
2.
3.
1
3-2 The Global Marketplace
4 components of the International Business Environment:
1.
2.
3.
4.
__________________ is the accepted behaviors, customs, and values of a society.
Infrastructure________________ __________________ are restrictions to free trade.
3 Formal Trade Barriers:
1. Quota2. A _________________ is a tax that a government places on certain imported products.
3. EmbargoA _______________ ________________ ______________ is a selected area where products can be
imported duty-free and then stored, assembled, and/or used in manufacturing.
Locations of FTZs:
1.
2.
Under a _____________ _______________ ___________________, member countries agree to remove
duties, also called import taxes, and trade barriers on products traded among them.
In a ______________________ ____________________, members do away with duties and other trade
barriers.
3-3 International Business Organizations
A _______________________ _________________________ (MNC) is an organization that does
business in several countries.
2 strategies used by MNCs:
1. global strategyexample2. multinational strategyexampleGlobal Market Entry Modes:
1. __________________ is selling the right to use some intangible property (production process,
trademark, or brand name) for a fee or royalty.
2. A ______________________ is the right to use a company name or business process in a
specific way.
3. A ________________ _____________________ is an agreement between two or more
companies to share a business project.
2