Business Concepts Chapter 3

Quotas are

A free-trade zone is when member countries agree to remove duties and trade barriers on products traded among them

A nation's Balance of Payments is favorable when it receives more money in a year than it pays out

When a country has an absolute advantage, it can produce a good or service at a lower cost than other countries.

The IMF promotes economic cooperation by maintaining an orderly system of world trade and exchange rates.

A tariff is a tax a government places on certain imported products

The World Trade Organization (2)

Free-trade zones, free-trade agreements, embargoes, and common markets tend to encourage international trade

The international business environment involves four main components: What is NOT one of them?

When a country specializes in the production of a good or service at which it is relatively more efficient, it has a(n)

Franchising is

Global strategy uses the same product and marketing strategy worldwide

A joint venture is an agreement between two or more companies to share a business project.

A multinational company is owned by individuals residing in several different countries

 Informal trade barriers are

When a country's balance of trade is negative, it exports more than it imports

Infrastructure

Supply and demand has no effect on the foreign exchange rate.

The balance of payments is the value of currency in one country compared with the value of currency in another.

The three main factors that affect currency exchange rates among countries are