Intro to Business Ch3 Discussion Questions Name: _____________

Using your notes and textbook pages 52-69, answer the following questions with
complete answers.

1. What is domestic business?

Making buying Selling of goods and services within a country

2. What is international business?

Business activities needed for creating,

Shipping
Selling goods and services across national borders

3. What is international business frequently referred to as?

Foreign Trade

4. What is absolute advantage? Comparative advantage?

A country produces a good or service at a lower cost than other countries

A country specializes in the production of a good or service at which it is relatively more
efficient

5. How does importing differ from exporting?

Importing is items brought from other countries and Exporting is Goods and Services

sold to other countries

6. What would happen if there was not foreign trade?

Then We wouldn’t have some resources

7. What is the major reason people work?

 To have Money

8. What is foreign debt?

When a country Imports more money than it exports

9. How does balance of trade differ from balance of payments?

If you pay more than you make then you are Un-Balanced

10. What is a trade surplus?

When A country Exports more than it imports

11. What is trade deficit?

When a country imports more than it imports

12. A country can have a trade ___surplus_____ with one country and a trade

___deficit_____ with another.

13. When tourists travel, what do they do for that country?

Give them more money and May change them Currency

14. What is it considered in the United States if bribes are used?

Unethical

15. What consists of banks that buy and sell different currencies?

Foreign Exchange
16. What three things are factors affect the value of a country’s currency?

Balance of Payments

Economic

Political Stability

17. What countries have the U.S. dollar as their currency?

Ecuador, El Salvador, and Panama also of course the USA

18. What can cause political instability?

When they change laws

19. List the four main elements of the international business environment.

Geography

Economic Development

Cultural Influences

Political and Legal Concerns

20. What is accepted behaviors, customs, and values of a society?

Culture

21. What actions could be taken to encourage international trade?

Free trade zones, Free trade Agreements, and Common Markets

22. What are three formal trade barriers and what do they mean?
Quotas- Limit on a quantity of a product

Tariffs- Tax that a government places on certain imported products

Embargoes- Stop an import or export of a product

23. What three things can create informal trade barriers?

Culture

Traditions

The religion of a country

24. What is a quota (explain in detail)?

Limit on a quantity of a product

25. What is a tariff (explain in detail)?

Tax that a government places on certain imported products

26. What is an embargo (explain in detail)?

Stop an import or export of a product

27. What does the government view exporting as?

Effective Way to create jobs

28. What is a selected area where products can be imported duty-free, then stored,

assembled and used in manufacturing?

Free Trade Zones

29. Based on your answer to #27, where are these usually located?

Near Seaport or Airport

30. What do countries do under a free-trade agreement?

Remove taxes and Trade Barriers on Products

31. Where are cell phones changing the way, farmers do business?

Africa

32. What is a Multinational Company?

A company that has business in multiple Nations

33. What are two strategies commonly used by MNC’s and what do they mean?

Sold by the same manner throughout the world and it means You will get the same
product no matter where you shop. Uses the same product and marketing strategy

34. What are the five MNC benefits?

A large number of goods available

Lower Prices
Career opportunities
Foster- Understanding, communication, and respect
Friendly international relations

35. What are the drawbacks of multinational companies?

Major economic power

Worker dependence on MNC for Jobs
Consumer dependence
Influence or Control political power

36. How does licensing differ from a franchise?

Licensing is Allowing companies to produce items in other countries- not actively

involved and Franchising is Allowing companies to produce items in other countries- not
actively involved

37. What is a joint venture and in what type of business is it most popular?

Allows two or more companies to share business projects

Manufacturing

38. What is the World Trade Organization?

Promotes Trade around the world with more than 150 different companies

39. What is the International Monetary Fund?

Helps promote economic cooperation

40. International business activities can be ____very complex______.

41. What is the World Bank and how many members does it have?

Gives Economic Aid to less developing Countries

42. How does the International Monetary Fund assist countries?

Makes Wars Less Likely

43. How many tons of food is thrown away in the U.S. each day?
1,000

44. How many people die each day from hunger-related causes?

20,000

45. How many people visit the Hunger Site each day?

200,000