Global Business Chapter 5

Selling abroad

buying from abroad

Tangible products being traded

Intangible servies being traded

An economic condition in which a nation imprts more than it exports

An economic condition in which a nation exports more than it imports

The aggregation of importing and exporting that leads to the country-level trade surplus or deficit

The major theories of international trade that were advanced before the 20th century, which consists of (1) mercantilism, (2) absolute advantage, (3) comparitive advantage

The major theroies of inernational trade that were advanced in the 20th centry, which consist of (1) product life cycle, (2) strategic trade, (3) national competivie advantage of industies

A theory that suggests that the wealth of the world is fixed and that a national that exports more and imports less will be richer

The idea that governments should actively protect domestic industries from imports and virorously promote exports

The idea that free market forces should determine how much to trade with little or no government intervention

A theory that suggests that under free trade, a national gains by specializing in economic activities in which is has an absolute advantage

The economic advantage one nation enjoys that is absolutely superior to other nations

A theory that focuses on the relative (not absolute) advantage in one economic activity that one nation enjoys in comparison with other nations