Intro: Ch 3 Vocab

when firms acquire foreign firms or develop new facilities from the ground up in foreign countries

• trade deficit
• direct investment
• European Union
• balance of payments deficit

when two or more companies join forces, sharing resources, risks and profits, but not actually merging

• embargo
• joint venture
• World Bank
• partnership

opportunity of giving up the second-best choice when making a decision

• Opportunity Cost
• trade deficit
• exchange rate
• protectionism

benefit a country has in a given industry when it can produce more of a product than other nations using the same amount of resources

• balance of payments deficit
• voluntary export restraints
• absolute advantage
• World Bank

benefit a country has in a given industry if it can make products at a lower opportunity cost than other countries

• International Monetary Fund
• joint venture
• partnership
• comparative advantage

basic measure of difference in value between a nation’s exports and imports, including both goods and services

• European Union
• balance of trade
• protectionism
• Opportunity Cost

overage that occurs when the total value of a nation’s exports is higher than the total value of its imports

• exchange rate

• embargo

• trade surplus

• countertrade

shortfall that occurs when the total value of a nation’s imports is higher than the total value of its exports

• tariffs

• International Monetary Fund

• joint venture

• trade deficit

measure of the total flow of money into or out of a country

• balance of payments
• World Bank
• balance of payments deficit
• voluntary export restraints

overage that occurs when more money flows into a nation than out of that nation

• Opportunity Cost
• voluntary export restraints
• balance of payments surplus
• exchange rate