Chapter 1: Globalisation

Question 1

International business

Answer 1

Commercial transaction that crosses the border of two or more nations.

Question 2

Imports

Answer 2

Goods and services purchased abroad and brought into a country

Question 3

Exports

Answer 3

Goods and services sold abroad and sent out of a country

Question 4

Multinational corporation

Answer 4

Business that has direct investments abroad in multiple countries.

Question 5

Born global firm

Answer 5

Company that adopts a global perspective and engages in international business from or near its inception.

Question 6

Globalisation

Answer 6

Trend towards greater economic, cultural, political and technological interdependence among national institutions and economies.

Question 7

Globalisation of markets refers to the convergence in buyer preferences in markets around the world.

Answer 7

• Reduces marketing costs by standardizing marketing activities.
• Creates new market opportunities if its home market is small or becomes saturated.
• Levels uneven income streams, seasonal products can use international sales to level its income.
• Local buyers needs, the benefit of serving customers with an adapted product may out weigh the benefit of a standardized one.
• Global sustainability, meets the needs of the present without compromising future generations ability to meet their own needs.

Question 8

Sustainability

Answer 8

Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

Question 9

Globalisation of production refers to the dispersal of production activities to locations that help a company achieve its cost minimization or quality maximization objectives for a good or service.

Answer 9

• Access lower cost workers. I.e. call centres
• Access technological expertise I.e the Simpsons are animated in south korea
• Access production inputs. I.e. Japanese paper has forest and processing facilities in Australia

Question 10

Forces driving globalisation

Answer 10

Falling barriers to trade and investment and technological innovation.

Question 11

General agreement on Tariffs and Trade (GATT)

Answer 11

Treaty designed to promote free trade by reducing both tariffs and nontariff barriers to international trade.

Question 12

Non-tariff barriers

Answer 12

are limits on the quantity of imported product

Question 13

World trade organization (WTO)

Answer 13

is the international organization that enforces the rules of international trade.

Question 14

World bank

Answer 14

Agency created to provide financing for national economic development efforts.

Question 15

International monetary fund

Answer 15

Agency created to regulate fixed exchange rates and to enforce the rules of the international monetary system.

Question 16

Gross Domestic Product (GDP)

Answer 16

Value of all goods and services produced by a domestic economy over a one-year period.

Question 17

Domestic Gross National Product

Answer 17

Value of all goods and services produced by a country’s domestic and international activities over a one year period.

Question 18

GDP or GNP per capita

Answer 18

Nations GDP or GNP divided by its population.

Question 19

E-business/e-commerce

Answer 19

Use of computer networks to purchase, sell or exchange products; to service customers; and to collaborate with partners.