Terms:
Define the following terms and concepts by typing them on your chapter three word document. Comparative v/s Absolute Advantage-comparative advantage is defined as the theory that states that a country should see to other countries those products that it produces most efficiently, and buy from other countries those products that it cannot produce as effectively as compare to absolute advantage which states the advantage that exists when a country has a monopoly on producing a specific product or is able to produce it more efficiently than all other countries. Trade Deficit states that an unfavorable balance of trade; occurs when the value of a country’s imports exceeds that of its exports
Trade Surplus is defined as a favorable balance of trade; occurs when the value of a country’s exports exceeds that of its imports. Tariff is described as a tax imposed on imports Balance of Trade is the total value of a nation’s exports compared to its imports over a particular time period Balance of Payments is the difference between money coming into a country from exports and money leaving the country from imports plus money flows from factors such as tourism, foreign aid, military expenditures, and foreign investment Dumping is selling products in a foreign country at lower prices than those charged in the producing country Licensing is a global strategy in which a firm allows a foreign company to produce its products in exchange for a fee Exporting is selling products to another country "Ethnocentricity" (page 71) :characterized by or based on the attitude that one’s own group is superior Franchising is the right to use a specific business’ name and sell its products or services in a given territory Foreign Direct Investment is buying permanent property and businesses in foreign nations