Understanding Global Business with Key Terms
Explore essential concepts in global business such as tariffs, exchange rates, imports, trade surplus, protectionism, free trade, multinational corporations, and more. Enhance your knowledge of how countries interact economically and the impact on businesses worldwide.
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Presentation Transcript
1 Ch. 10 Business in a Global Economy
A special tax on goods made in one and sold in the US. 2 Tariff
The price at which one currency can buy another currency. 3 Exchange rate
Products one country buys from another country. 4 imports
The difference in value between how much a country imports and how much it exports. 5 Balance of trade
When a country exportsmore than it imports. 6 Trade surplus It has money left over to buy more products.
When a country importsmore than it exports. 7 Trade deficit It means the country is in debt.
When the value of a countries currency goes up compared to another country. Favorable exchange rate A country with a favorable exchange rate can buy more. 8
When the value of a countries currency goes down compared to another country. 9 Unfavorable exchange rate
A view that there should be limits on foreign trade in order to protect business at home. 10 protectionism
A view that all countries should be free to compete anywhere in the world without restrictions. Free trade 11
A company that does business in many countries and has facilities and offices in many countries. 12 Multinational corporation
A complete ban on a product or all the products from another country. embargo 13
A fixed limit set by the government on the imports of a product. 14 quota
Products made in one country and sold in another. 15 exports
Advantages of Free Trade 16 It opens up new markets It creates new jobs Competition forces businesses to be more efficient and productive Consumers have more choices It promotes cultural understanding Helps countries raise their standard of living
Disadvantages of Free Trade 17 Some people don t like That it opens up new markets Consumers have more choices It promotes cultural understanding Helps countries raise their standard of living It damages sales of our country.
__________puts limits on foreign trade to protect businesses at home. 18 Protectionism
Advantage of protectionism 19 Foreign competitors can lower the demand for products made at home. Cheap labor in other countries can lower wages or threaten jobs at home. A country can become too dependent on another country.
Disadvantage of protectionism 20 Some people don t like that Foreign competitors can lower the demand for products made at home. Cheap labor in other countries can lower wages or threaten jobs at home. A country can become too dependent on another country.
What is NAFTA 21 North American Free Trade Agreement USA, Canada and Mexico
Difference between tariff and quota 22 Tariff is a tax. Quota is a limit.
What is the purpose of having an exchange rate. 23 Currencies of different countries have different values. How much money a currency is worth depends on how much a country wants to buy its products.
If an American company wants to import cheese from France, it has to pay for it in French currency. 24 True
How much the currency of a country is worth depends on how much it charges for its products. 25 false
When the value of a countrys currency goes down, it has a favorable exchange rate. 26 true
Some countries choose to lower the value of their currency to bring in more businesses. 27 true
When a country imports more than it exports, it has a trade surplus. 28 false
Until the 1980s, the US had a trade surplus. 29 true
Protectionism promotes cultural understanding and cooperation between countries. 30 false
NAFTA is a trade alliance between the US and Europe. 31 false
An embargo is a special tax on goods made in another country. 32 false
Global competition often leads to trade disputes between countries. 33 true
