Chapter 2 Flashcards
Greenhouse Effect
turning of our atmosphere into a kind of greenhouse as a result of the addition of carbon dioxide and other greenhouse gasses
global warming
a warming of the planet that will have disastrous effects on the planet
Arab Springs
series of anti-government protests and uprisings in a number of Arab countries facilitated by new social media tools available to people in the region
world trade
flow of goods and services among different countries- the value of all the exports and imports of the world’s nations
countertrade
type of trade in which goods are paid for with other items instead of with cash
General Agreement on Tariffs and Trade (GATT)
international treaty to reduce import tax levels and trade restrictions
World Trade Organization (WTO)
organization that replaced GATT; the WTO sets trade rules for its member nations and mediates disputes between nations
World Bank
international lending institutions that seeks to reduce poverty and improve the lives of people by improving economies and promoting sustainable development
International Monetary Fund (IMF)
international organization that seeks to ensure the stability of the international monetary exchange by controlling fluctuations in exchange rates
foreign exchange rates (forex rate)
price of a nation’s currency in terms of another currency
balance of payments
statement of how much trade a country has going out compare to how much it has coming in; if a country is buying more than selling, it will have a negative balance of payments
protectionism
policy adopted by a government to give domestic companies an advantage
import quotas
limitations set by a government on the amount of a product allowed to enter a country
embargo
quota completely prohibiting specified goods from entering/leaving a country
tariffs
taxes on imported goods
economic communities
groups of countries that band together to promote trade among themselves and to make it easier for member nations to compete elsewhere
least developed countries (LDC’s)
a country at the lowest stage of economic development
gross domestic product (GDP)
total dollar value of goods and services produced by a nation within its borders in a year
economic infrastructure
quality of a country’s distribution, financial, and communications systems
level of economic development
broader economic picture of a country
standard of living
indicator of the average quality and quantity of goods and services consumed in a country
developing countries
countries in which the economy is shifting its emphasis from agriculture to industry
bottom of the pyramid (BOP)
collective name for the group of consumers throughout the world who live on less than $2 a day
sachet
affordable one-use packages of cleaning products, fabric softeners, shampoo, etc., for sale to consumers in least developed and developing countries
BRICS countries
Brazil, Russia, India, China, South Africa
-fastest growing and developing countries; with more than 3 billion people, 42% of the world population, and about 20% of the gross world product
developed countries
country that boasts sophisticated marketing systems, strong private enterprise, and bountiful market potential for many goods and services
Group of Seven (G7)
informal forum of the 7 most economically developed countries that meets annually to discuss major economic and political issues facing the international community; formerly G8 but Russia was excluded in 2014
business cycle
overall patterns of change in the economy- including periods of prosperity, recession, depression, and recovery- that affect consumer and business purchasing power
competitive intelligence (CI)
process of gathering and analyzing publicly available info about rivals
discretionary income
portion of income people have left over after paying for necessities such as housing, utilities, food, and clothing
product competition
when firms offering different products compete to satisfy the same consumer needs and wants
broad competition
when firms offering similar goods/services compete on the basis of their brand’s reputation or perceived benefits
monopoly
market situation in which one firm, the only supplier of a particular product, is able to control the price, quality, and supply of that product
oligopoly
market structure in which a relatively small number of sellers, each holding a substantial share of the market, compete in a market with many buyers
monopolistic competition
market structure in which many firms, each having slightly different products, offer unique consumer benefits
perfect competition
market structure in which many small sellers, all of whom offer similar products, are unable to have an impact on the quality, price or supply of a product
drones (UAV’s)
unmanned arial vehicles or flying robots controlled remotely using GPS tech
patent
legal mechanism to prevent competitors from producing or selling an invention; aimed at reducing or eliminating competition in a market for a period of time
nationalization
when a domestic government reimburses a foreign company (often not for full value) for its assets after taking over
expropriation
when a domestic government seizes a foreign company’s assets without any reimbursement
local content rules
form of protectionism stipulating that a certain proportion of a product must consist of components supplied by industries in the host country or economic community
US Generalized System of Preferences (GSP)
program to promote economic growth in developing countries by allowing duty-free entry of goods into the US
demographics
statistics that measure observable aspects of a population, including size, age, gender, ethnic group, income, education, occupation, and family structure
cultural values
society’s deeply held beliefs about right and wrong ways to live
collectivist cultures
cultures in which people subordinate their personal goals to those of a stable community
individualist cultures
cultures in which people tend to attach more importance to personal goals than to those of the larger community
social norms
specific rules dictating what is right or wrong, acceptable or unacceptable
consumer ethnocentrism
consumers’ feeling that products from their own country are superior or that it is to buy products produced in another country
export merchants
intermediaries a firm uses to represent in it other countries
licensing agreement
agreement in which one firm gives another firm the right to produce and market its product in a specific country or region in return for royalties
franchising
form of licensing involving the right to adapt an entire system of doing business
strategic alliance
relationship developed between a firm seeking a deeper commitment to a foreign market and a domestic firm in the target country
joint venture
strategic alliance in which a new entity owned by two or more firms allows the partners to pool their resources for common goals
straight extension strategy
product strategy in which a firm offers the same product in both domestic and foreign markets
product adaptation strategy
product strategy in which a firm offers a similar but modified product in foreign markets
product invention strategy
product strategy in which a firm develops a new product for foreign markets
backward invention
product strategy in which a firm develops a less advanced product to serve the needs of people living in countries without electricity or other elements of a developed infrastructure
free trade zones
designated areas where foreign companies can warehouse goods without paying taxes or customs duties until they move the goods into the marketplace
gray market goods
items manufactured outside a country and then imported without the consent of the trademark holder
dumping
a company tries to get a toehold in a foreign market by pricing its products lower than it offers them at homes
ethical relativism
suggests that what is ethical in one culture is not necessarily the same as in another culture
business ethics
basic values that guide a firm’s behavior
code of ethics
written standards of behavior to which everyone in the organization must subscribe
bribery
when someone voluntarily offers payment to get an illegal advantage
extortion
when someone in authority extracts payment under duress
green customers
those consumers who are most likely to actively look for and buy products that are eco-friendly
fair trade suppliers
companies that pledge to pay a fair price to producers in developing countries, to ensure that the workers who produce the goods receive a fair wage, and to ensure that these manufacturers rely where possible on environmentally sustainable production practices
locavorism
trend for shoppers to actively look for products that come from farms within 50-100 miles from where they live
