Chapter 4

Question 1

Globalization

Answer 1

process by which the world economy is becoming a single interdependent system

Question 2

import

Answer 2

product made or grown abroad but sold domestically

Question 3

export

Answer 3

product made or grown domestically but shipped abroad

Question 4

benefits of globalization

Answer 4

higher standards or living
improved business profits
technology
competition

Question 5

downside of globalization

Answer 5

exploitation
bypassing rules
loss of culture
benefit rich more than poor

Question 6

3 major market economies

Answer 6

North america
europe
pacific asia

Question 7

treaty

Answer 7

legal agreement that specifies areas ins which nations will cooperate with one another

Question 8

international trade

Answer 8

exchange of products or currency takes place across national borders

Question 9

what is used to decide whether an overall balance exists between imports and exports

Answer 9

balance of trade and payments

Question 10

biggest concern of trade balances

Answer 10

flow of currency

Question 11

trade deficit

Answer 11

imports exceed exports

Question 12

trade surplus

Answer 12

exports exceed imports

Question 13

balance of payments

Answer 13

for of all money into or out of a country

Question 14

factors of balance of payment

Answer 14

balance of trade
tourism
foreign aid programs
money exchange

Question 15

exchange rate

Answer 15

rate at which the current of one nation can be exchanged for the currency of another

Question 16

fixed exchange rate

Answer 16

any country’s currency relative to that of another remains constant

Question 17

floating exchange rate

Answer 17

value of 1 country’s currency relative to that of another caries with market conditions

Question 18

forms of competitive advantage

Answer 18

absolute advantage
comparative advantage
national competitive advantage

Question 19

absolute advantage

Answer 19

ability to produce something more efficiently than any other country can

Question 20

comparative advantage

Answer 20

ability to produce some products more efficiently than others

Question 21

national competitive advantage

Answer 21

international competitive advantage stemming from a combination of factor conditions, demand conditions, related and supporting industries, and firm strategies, structures, and rivalries

Question 22

decisions when considering globalization

Answer 22

going international - is there a demand for your product
levels of international involvement
international organizational structures

Question 23

outsourcing

Answer 23

practice of paying supplier and distributors to perform certain business processes or to provide needed resources

Question 24

offshoring

Answer 24

practice of outsourcing to foreign countries

Question 25

exporter

Answer 25

firm that distributes and sells product to one of more foreign countries

Question 26

importer

Answer 26

firm the buys products in foreign markets and then imports them for resale domestically

Question 27

international firm

Answer 27

firm the designs, produces, and markets products in many nations

Question 28

independent agent

Answer 28

foreign individual that agrees to represent an exporter’s interests

Question 29

licensing arrangements

Answer 29

firm that chooses foreign organizations to manufacture or market their products in another country

Question 30

branch office

Answer 30

foreign office set up by an international or multinational firm

Question 31

strategic alliance

Answer 31

company finds a foreign partner to contrite about half of the resources to establish and operate a new business in the partners country

Question 32

foreign direct investment

Answer 32

firm buys or establishes tangle assists in another country

Question 33

hofstedes orientations

Answer 33

social
power
uncertainty
goal
time

Question 34

social orientation

Answer 34

a person’s beliefs about the relative importance of the individual versus the group they belong

Question 35

power orientation

Answer 35

beliefs that people in a culture hold about the appropriateness of power and authority differences in hierarchies

Question 36

uncertainty orientation

Answer 36

feeling individuals have regarding uncertain and ambiguous situations

Question 37

goal orientation

Answer 37

people are motivated to work toward different kinds of goals

Question 38

time orientation

Answer 38

extent to which members of a culture adopt a long term versus a short term outlook on work, life, and societal elements

Question 39

quota

Answer 39

restriction on the number of produces of a certain type that can be imported into a country

Question 40

embargo

Answer 40

government order banning exportation or importation of a particular product or all products from a certain country

Question 41

tariff

Answer 41

tax levied on imported products

Question 42

revenue tariff

Answer 42

raises government money

Question 43

protective tariff

Answer 43

discourages particular imports

Question 44

local content laws

Answer 44

laws requiring that products sold in a particular country be at least part made there

Question 45

business practice laws

Answer 45

laws governing business practices in given countries

Question 46

cartels

Answer 46

association of producers whose purpose is to control supply and prices

Question 47

dumping

Answer 47

practice of selling products abroad fro less than the cost of production