Terms used in International Business Environment
International Business Environment Terms Used
Absolute advantage-
A country has an absolute advantage when it is more
efficient than any other country at producing a product.
Balance of payments accounts–
National accounts that track both payments to and
receipts from foreigners.
Bill of lading–
A document issued to an exporter by a common carrier
transporting merchandise.
Common market-
A group of countries committed to the pursuit of a
common external trade policy
Comparative advantage–
The theory that countries should specialize in the production of goods and services they can produce most efficiently .
Current account deficit-
The current account of the balance of payments is in
surplus when a country exports more goods and services
that it imports.
Deferral principle-
Parent companies are not taxed on the income of a
foreign subsidiary until they actually receive a dividend
from that subsidiary.
Economic risk-
The likelihood that events, including economic mismanagement, will cause drastic changes in a country’s
business environment that adversely affect the profit and
other goals of a particular business enterprise.
Eurobonds–
A bond placed in countries other that the one in whose
currency the bond is denominated.
Eurocurrency-
Any currency banked outside of its country of origin.
European Monetary System (EMS)–
EU system designed to create a zone of monetary stability
in Europe, control inflation, and coordinate exchange
rate policies of EU countries.
European Union (EU)–
An economic group of 15 European nations: Austria,
Belgium, Great Britain, Denmark, Finland, France, Germany, Greece, the Netherlands, Ireland, Italy, Luxembourg, Portugal, Spain and Sweden
Exchange rate-
The rate at which one currency is converted into another.
Expatriate manager-
A national of one country appointed to a management
position in another country.
Exporting-
Sale of products produced in one country to residents of
another country.
Fixed exchange rates-
A system under which the exchange rate for converting
one currency into another is fixed.
