Key Terms
International business
Commerce in which goods, services, or resources cross the borders of two or more nations. Egyptians trading across the R
Globalization
A shift toward a more integrated world economy where culture, ideas, and beliefs are exchanged in addition to goods, ser
Economic
164 official national currencies; exchange rates fluctuate constantly.
Legal
Laws vary by country and municipality. A local ordinance can affect your menu, your marketing, your product line.
Competitive
You're not just competing with domestic rivals; local and international competitors operate in every market.
Technological
Consumer expectations around speed, connectivity, and service are shaped by global tech adoption — not just what's happe
Social/Cultural
Religious requirements, dietary laws, gender norms, and local customs all shape what you can sell and how.
Absolute advantage
Country A is the only source of something, OR produces more of it with the same inputs.
Comparative advantage
Country A produces something at a lower opportunity cost than Country B — even if Country B could technically produce it
Opportunity cost
The value of the next best alternative given up when a choice is made.
Access to factors of production
Natural resources, labor, capital, and entrepreneurship may be cheaper or more available abroad.
Innovation and ideas
Exposure to foreign markets surfaces unmet needs and new product concepts.
Risk reduction
Multiple trading partners and sources = less dependence on any single one. If one source fails, operations continue.
Formula
Total money inflow - Total money outflow = Balance of Payments
Trade surplus
Exports exceed imports. Country is a net exporter.