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Unit 1 A brief introduction to international trade
Key
I. Answer my questions
1. International trade is business whose activities involve the crossing of national borders. It includes not only international trade and foreign manufacturing but also encompasses the growing services industry in areas such as transportation, tourism, banking, advertising, construction, retailing, wholesaling, and mass communications. It includes all business transactions that involve two or more countries. Such business relationship may be private or governmental.
2. Sales expansion, resource acquisition and diversification of sales and supplies.
3. To gain profit.
4. To seej out foreign markets and procurement.
5. There are four major forms which are the following:
Merchandise exports and Imports, Service Exports and Imports, Investment and Multinational Enterprise.
6. It is the account which is a summary statement of the flow of all international economic and financial transactions between one nation ( United States ) and the rest of the world over some period of time, usually one year.
7. Merchandise Exporting and Importing.
8. Yes. There are great differences between them.
1) direct investment takes place when control follows the investment. It usually means high commitment of capital, personnel, and technology abroad. It aims at gaining of foreign resources and foreign markets. Direct investment may often get higher foreign sales than exporting. And sometimes it involves two or more parties.
2) While portfolio investments are not under control. And they are used primarily for financial purposes. Treasures of companies, for example, routinely more funds from one country to another to get a higher yield on short term investments.
9. MNE is the abbreviation of the multinational enterprise. Its synonyms are NNC (the multinational corporation) and TNC (transnational corporation).
10. Examples are