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INTB 1203 > Chapter 7-13 > Flashcards

Chapter 7-13 Flashcards

1
Q

The absence of barriers to the free flow of goods and services between countries.

A

free trade

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2
Q

International treaty that committed signatories to lowering barriers to the free flow of goods across national borders and led to the WTO.

A

General Agreement on Tariffs and Trade (GATT)

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3
Q

Tariff levied as a fixed charge for each unit of good imported.

A

specific tariff

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4
Q

a tariff levied as a proportion of the value of an imported good

A

ad valorem tariff

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5
Q

A direct restriction on the quantity of a good that can be imported into a country.

A

import quota

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6
Q

Lower tariff rates applied to imports within the quota than those over the quota.

A

tariff rate quota

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7
Q

A quota on trade imposed from the exporting coun- try’s side, instead of the importer’s; usually imposed at the request of the import- ing country’s government.

A

voluntary export restraint (VER)

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8
Q

Extra profit producers make when supply is artificially limited by an import quota.

A

quota rent

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9
Q

A requirement that some specific fraction of a good be produced domestically.

A

local content requirement (LCR)

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10
Q

Administrative policies, typically adopted by government bureaucracies, that can be used to restrict imports or boost exports.

A

administrative trade policies

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11
Q

Selling goods in a foreign market for less than their cost of production or below their “fair” market value.

A

dumping

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12
Q

Designed to punish foreign firms that engage in dumping and thus protect domestic producers from unfair foreign competition.

A

antidumping policies

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13
Q

New industries in develop- ing countries must be temporarily protected from international competition to help them reach a position where they can compete on world markets with the firms of developed nations.

A

infant industry argument

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14
Q

Government policy aimed at improving the competitive position of a domestic industry and/or domestic firm in the world market.

A

strategic trade policy

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15
Q

Enacted in 1930 by the U.S. Congress, this act erected a wall of tariff barriers against imports into the United States.

A

Smoot–Hawley Act

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16
Q

Reciprocal trade agreements between two or more partners.

A

multilateral or bilateral trade agreements

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17
Q

Agreements among countries in a geographic region to reduce and ultimately remove tariff and non-tariff barriers to the free flow of goods, services, and factors of production between each other.

A

regional economic integration

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18
Q

A group of countries committed to removing all barriers to the free flow of goods and services between each other but pursuing independent external trade policies.

A

free trade area

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19
Q

A free trade association including Norway, Iceland, Liechtenstein, and Switzerand

A

European Free Trade Association (EFTA)

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20
Q

A group of countries committed to (1) removing all barriers to the free flow of goods and services between each other and (2) the pursuit of a common external trade policy.

A

customs union

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21
Q

A group of countries committed to (1) removing all- barriers to the free flow of goods, services, and factors of production between each other and (2) the pursuit of a common external trade policy.

A

common market

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22
Q

A group of countries committed to (1) removing all- barriers to the free flow of goods, services, and factors of production between each other; (2) the adoption of a common currency; (3) the harmonisation of tax rates; and (4) the pursuit of a common external trade policy.

A

economic union

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23
Q

A central political apparatus coordinates economic, social, and foreign policy.

A

political union

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24
Q

Trade created due to regional economic integration; occurs when high-cost domestic producers are replaced by low-cost foreign producers within a free trade area.

A

trade creation

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25
Q

Trade diverted due to regional economic integration; occurs when low-cost foreign suppliers outside a free trade area are replaced by higher-cost suppliers within a free trade area.

A

trade diversion

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26
Q

The 1957 treaty that established the European Community.

A

treaty of Rome

27
Q

Responsible for proposing EU legislation, implement- ing it, and monitoring compliance.

A

European Commission

28
Q

The heads of state of EU members and the president of the European Commis- sion.

A

European Council

29
Q

Elected EU body that pro- vides consultation on issues proposed by the European Commission.

A

European Parliament

30
Q

A European Union–sanctioned treaty that will allow the European Parliament to become the co-equal legislator for almost all European laws.

A

Treaty of Lisbon

31
Q

Treaty agreed to in 1992, but not ratified until January 1, 1994, that committed the 12 member states of the European Community to a closer economic and political union.

A

Maastricht Treaty

32
Q

Region in which similarities in economic activity make a single currency and exchange rate feasible instruments of macroeconomic policy.

A

optimal currency area

33
Q

A 1969 agreement among Bolivia, Chile, Ecuador, Colombia, and Peru to establish a customs union.

A

Andean Community

34
Q

Pact among Argentina, Brazil, Paraguay, and Uruguay to establish a free trade area.

A

Mercosur

35
Q

Formed in 1967, an attempt to establish a free trade area among Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Vietnam, and Thailand.

A

Association of Southeast Asian Nations (ASEAN)

36
Q

Performing activities that increase the value of goods or services to consumers.

A

value creation

37
Q

The totality of a firm’s organisation, including formal organisational structure, control systems and incentives, organisational culture, processes, and people.

A

organisation architecture

38
Q

Firm skills that competitors cannot easily match or imitate.

A

core competence

39
Q

Cost advantages from per- forming a value creation activity at the optimal location for that activity.

A

location economies

40
Q

When different stages of value chain are dispersed to those locations around the globe where value added is maximised or where costs of value creation are minimised.

A

global web

41
Q

Systematic production cost reductions that occur over the life of a product.

A

experience curve

42
Q

Cost savings from learning by doing.

A

learning effects

43
Q

A firm focuses on increasing profitability and profit growth by reaping the cost reductions that come from economies of scale, learning effects, and location economies.

A

global standardisation strategy

44
Q

Increasing profitability by customising the firm’s goods and services so that they provide a good match to tastes and preferences in different national markets.

A

localisation strategy

45
Q

Attempt to simultaneously achieve low costs through location economies, economies of scale, and learning effects while also differentiating product offerings across geographic markets to account for local differences and fostering multidirectional flows of skills between different subsidiaries in the firm’s global network of operations.

A

transnational strategy

46
Q

Trying to create value by transferring core competencies to foreign markets where indigenous competitors lack those competencies.

A

international strategy

47
Q

Costs an early entrant bears that later entrants avoid, such as the time and effort in learning the rules, failure due to ignorance, and the liability of being a foreigner.

A

pioneering costs

48
Q

A project in which a firm agrees to set up an operating plant for a foreign client and hand over the “key” when the plant is fully operational.

A

turnkey project

49
Q

Arrangement in which a licensor grants the rights to intangible property to a licensee for a specified period and receives a royalty fee in return.

A

licensing agreement

50
Q

A specialised form of licensing in which the franchiser sells intangible property to the franchisee and insists on rules to conduct the business.

A

franchising

51
Q

A cooperative undertaking between two or more firms.

A

joint venture

52
Q

A subsidiary in which the firm owns 100 percent of the stock.

A

wholly owned subsidiary

53
Q

Ability to realise location and experience curve economies
Increased speed and flexibility of engaging target markets

A

Adv of Exporting

54
Q

High transport costs
Trade barriers
Problems with local marketing agents

A

Disadv of Exporting

55
Q

Ability to earn returns from process technology skills in countries where FDI is restricted

A

Adv of Turnkey

56
Q

Creation of efficient competitors Lack of long-term market presence

A

Disadv of Turneky

57
Q

Lack of control over technology
Inability to realise location and experience curve economies
Inability to engage in global strategic coordination

A

Adv of Licensing

58
Q

Low development costs and risks
Moderate involvement and commitment

A

Disadv of Licensing

59
Q

Low development costs and risks
Possible circumvention of import barriers, and strong sales potential

A

Avd of Franchsising

60
Q

Lack of control over quality
Inability to engage in global strategic coordination

A

Disadv of Franchising

61
Q

Access to local partner’s knowledge Shared development costs and risks Politically acceptable
Typically no ownership restrictions

A

Adv of JV

62
Q

Lack of control over technology
Inability to engage in global strategic coordination Inability to realise location and experience economies

A

Disadv of JV

63
Q

Protection of technology
Ability to engage in global
strategic coordination
Ability to realise location and experience economies

A

Adv of Wholly owned subsidiaries

64
Q

High costs and risks
Need for more human and nonhuman resources, and interaction and integration with local employees

A

Disadv of Wholly owned subsidiaries

INTB 1203 (1 decks)

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