BUS250 Ch. 1-2 Terms & Definitions Flashcards
Memorize the terms listed at the end of each chapter of the textbook.
Globalization
Trend away from distinct national economic units and toward one huge global market.
Globalization of Markets
Moving away from an economic system in which national markets are distinct entities, isolated by trade barriers and barriers of distance, time, and culture, and toward a system in which national markets are merging into one global market.
Globalization of Production
Trend by individual firms to disperse parts of their productive processes to different locations around the globe to take advantage of differences in cost and quality of factors of production.
Factors of Production
Inputs into the productive process of a firm, including labor, management, land, capital, and technological know-how (knowledge).
- land
- labor
- capital (financial resources available for use)
- management
- knowledge
General Agreement on Tariffs and Trade (GATT)
International treaty that committed signatories to lowering barriers to the free flow of goods across national borders and led to the WTO. (Signed in Geneva on October 30, 1947 and took effect on January 1, 1948)
World Trade Organization (WTO)
The organization that succeeded the General Agreement on Tariffs and Trade (GATT) as a result of the successful completion of the Uruguay Round of GATT negotiations. (Signed on 15 April 1994, officially commenced on January 1, 1995)
International Monetary Fund (IMF)
International institution set up to maintain order in the international monetary system.
World Bank
International institution set up to promote general economic development in the world’s poorer nations.
United Nations
An international organization made up of 193 countries headquartered in New York City, formed in 1945 to promote peace, security, and cooperation.
G20
Established in 1999, the G20 comprises the finance ministers and central bank governors of the 19 largest economies in the world, plus representatives from the European Union and the European Central Bank.
International Trade
Occurs when a firm exports goods or services to consumers in another country.
Foreign Direct Investment (FDI)
Direct investment in business operations in a foreign country.
Moore’s Law
The power of microprocessor technology doubles and its costs of production fall in half every 18 months.
Stock of Foreign Direct Investment
The total accumulated value of foreign-owned assets at a given time.
Multinational Enterprise (MNE)
A firm that owns business operations in more than one country.
International Business
Any firm that engages in international trade or investment.
Political Economy
The political, economic, and legal systems of a country.
Political System
System of government in a nation.
Collectivism
A political system that emphasizes collective goals as opposed to individual goals.
A Socialist
Someone who believes in public ownership of the means of production for the common good of society.
Communists
Those who believe socialism can be achieved only through revolution and totalitarian dictatorship.
Social Democrats
Those committed to achieving socialism by democratic means.
Privatization
The sale of state-owned enterprises to private investors.
Individualism
An emphasis on the importance of guaranteeing individual freedom and self-expression.
Democracy
Political system in which government is by the people, exercised either directly or through elected representatives.
Totalitarianism
Form of government in which one person or political party exercises absolute control over all spheres of human life and opposing political parties are prohibited.
Representative Democracy
A political system in which citizens periodically elect individuals to represent them in government.
Communist Totalitarianism
A version of collectivism advocating that socialism can be achieved only through a totalitarian dictatorship.
Theocratic Totalitarianism
A political system in which political power is monopolized by a party, group, or individual that governs according to religious principles.
Tribal Totalitarianism
A political system in which a party, group, or individual that represents the interests of a particular tribe (ethnic group) monopolizes political power.
Right-Wing Totalitarianism
A political system in which political power is monopolized by a party, group, or individual that generally permits individual economic freedom but restricts individual political freedom, including free speech, often on the grounds that it would lead to the rise of communism.
Market Economy
An economic system in which the interaction of supply and demand determines the quantity in which goods and services are produced.
Command Economy
An economic system where the allocation of resources, including determination of what goods and services should be produced, and in what quantity, is planned by the government.
Legal System
System of rules that regulate behavior and the processes by which the laws of a country are enforced and through which redress of grievances is obtained.
Common Law
A system of law based on tradition, precedent, and custom; when law courts interpret common law, they do so with regard to these characteristics.
United Nations Convention on Contracts for the International Sale of Goods (CIGS)
A set of rules governing certain aspects of the making and performance of commercial contracts between sellers and buyers who have their places of businesses in different nations.
Property Rights
Bundle of legal rights over the use to which a resource is put and over the use made of any income that may be derived from that resource.
Private Action
The theft, piracy, blackmail, and the like by private individuals or groups.
Public Action
The extortion of income or resources of property holders by public officials, such as politicians and government bureaucrats.
Foreign Corrupt Practices Act
U.S. law regulating behavior regarding the conduct of international business in the taking of bribes and other unethical actions.
Intellectual Property
Products of the mind, ideas (e.g., books, music, computer software, designs, technological know-how); intellectual property can be protected by patents, copyrights, and trademarks.
Patent
Grants the inventor of a new product or process exclusive rights to the manufacture, use, or sale of that invention.
Copyrights
The exclusive legal rights of authors, composers, playwrights, artists, and publishers to publish and disperse their work as they see fit.
Trademarks
The designs and names, often officially registered, by which merchants or manufacturers designate and differentiate their products.
World Intellectual Property Organization
An international organization whose members sign treaties to agree to protect intellectual property.
Paris Convention for the Protection of Industrial Property
International agreement to protect intellectual property.
Product Safety Laws
Set certain safety standards to which a product must adhere.
Product Liability
Involves holding a firm and its officers responsible when a product causes injury, death, or damage.
