Chapter 3 Prep

Set up to look and run like the parent company.

Countries set up contracts that remove import taxes and trade barriers on products traded among them.

An organization that does business in several countries.

Absolute advantage is the same as comparative advantage.

Items bought from other countries

A global company alters their products and marketing to fit the different countries they are present in and selling to.

Exchange rates have no impact on international business.

Selling the right to use some intangible property (productions process, trademark, or brand name) for a fee or royalty.

A situation where a country can produce a good or service at a lower cost than other countries.

A selected area where products can be imported duty-free and then stored, assembled, and/or used in manufacturing.

Restrictions to free trade.

Members do away with duties and other trade barriers. They allow companies to invest freely in each member’s country.

An agreement between two or more companies to share a business project.

Which of the following is NOT a cultural factor in the international business environment?

Stopping the export or import of a product completely.

A tax that a government places on certain imported products.

Goods and services sold to other countries.

A nation’s transportation, communication, and utility system.

A situation where a country specializes in the production of a good/service at which it is relatively more efficient.

A limit on the quantity of a product that may be imported or exported within a given period.

Which of the following would be an example of an international business?

The value of a currency in one country compared with the value in another.

The difference between the amount of money that comes into a country and the amount that goes out of it.

The difference between a country’s total exports and total imports.

An informal trade barrier is created by government actions.