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Unformatted text preview: Name:______________________________ GEB 1011 Principles of Business August 30, 2011 Chapter 3 The Dynamic Global Market Definitions: Importing-buying products from another country. Exporting- selling products to another county. Free Trade-the movement of goods and services among nations without political or economic barriers. Comparative Advantage theory-theory that states that a country should sell to other countries those products that it produces most effectively and efficiently, and buy more from other countries those products that it cannot produce as effectively or efficiently. Absolute advantage- the advantage that exists when a country has a monopoly on producing a specific product or is able to produce it more efficiently than all other countries. Balance of trade- the total value of a nations export compared to its imports measure over a particular period. Trade surplus-a favorable balance of trade; occurs when the value of a countrys exports exceeds that of its imports. Trade deficit an unfavorable balance of trade; occurs when the value of a countrys imports exceeds that of its exports. Balance of payments- the difference between money coming into a country(from exports) and money leaving the country (for imports) plus money flows from other factors such as tourism,...
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- Winter '11