COMM 211 Quiz 1 Flashcards
(130 cards)
1
Q
Foreign direct investment (FDI)
A
Direct investment in business operations in a foreign country. The acquisition or construction of physical capital by a firm from one (source) country in another (host) country.
2
Q
General Agreement on Tariffs and Trade (GATT)
A
International treaty that committed signatories to lowering barriers to the free flow of goods across national borders and led to the World Trade Organization (WTO).
3
Q
Globalization
A
Trend away from distinct national economic units and toward one huge global market.
4
Q
Globalization of markets
A
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.
5
Q
globalization of production
A
Manufacturing or operations when discussed in relation to global supply chains.
6
Q
international business
A
Any firm that engages in international trade or investment.
7
Q
International Monetary Fund (IMF)
A
International institution set up to maintain order in the international monetary system.
8
Q
international trade
A
Occurs when a firm exports goods or services to consumers in another country.
9
Q
Moore’s Law
A
The power of microprocessor technology doubles and its costs of production fall by half every 18 months.
10
Q
multinational enterprise (MNE)
A
A firm that owns business operations in more than one country.
11
Q
World Bank
A
International institution set up to promote general economic development in the world’s poorer nations.
12
Q
World Trade Organization (WTO)
A
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.
13
Q
Bill S-21
A
Otherwise known as the Corruption of Foreign Officials Act that received Royal Assent on December 10, 1998. It is Canadian legislation that makes the bribery, or other business corruption “tool” of a foreign official by a Canadian business person, a criminal offence.
14
Q
civil law
A
System of law based on a very detailed set of written laws and codes.
15
Q
collectivism
A
Political system that emphasizes collective goals as opposed to individual goals.
16
Q
command economy
A
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.
17
Q
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.
18
Q
communist totalitarianism
A
Version of collectivism advocating that socialism can only be achieved through a totalitarian dictatorship.
19
Q
communists
A
Those who believe socialism can be achieved only through revolution and totalitarian dictatorship.
20
Q
contract
A
Document that specifies the conditions under which an exchange is to occur and details the rights and obligations of the parties involved.
20
Q
contract law
A
Body of law that governs contract creation and enforcement.
21
Q
copyrights
A
Exclusive legal rights of authors, composers, playwrights, artists, and publishers to publish and dispose of their work as they see fit.
22
Q
democracy
A
Political system in which government is by the people, exercised either directly or through elected representatives.
23
Q
deregulation
A
Removal of government restrictions concerning the conduct of business.
24
economic risk
Likelihood that events, including economic mismanagement, will cause drastic changes in a country’s business environment that adversely affect the profit and other goals of a particular business enterprise.
25
first-mover advantages
Advantages accruing to the first to enter a market.
26
Foreign Corrupt Practices Act
U.S. law regulating behaviour regarding the conduct of international business in the taking of bribes and other unethical actions.
27
gross national income (GNI)
Total income of all citizens of a county, including the income from factors of production used abroad. Since 2001, the World Bank has used this measure of economic activity instead of the previously used GNP.
28
Human Development Index (HDI)
Attempt by the United Nations to assess the impact of a number of factors on the quality of human life in a country.
29
individualism
Emphasis on the importance of guaranteeing individual freedom and self-expression.
30
innovation
Development of new products, processes, organizations, management practices, and strategies.
31
late-mover disadvantages
Handicap experienced by being a late entrant in a market.
32
market economy
Economic system wherein the interaction of supply and demand determines the quantity in which goods and services are produced.
33
mixed economy
Economic system wherein certain sectors are left to private ownership and free market mechanisms, while others have significant government ownership and government planning.
34
Paris Convention for the Protection of Industrial Property
International agreement to protect intellectual property; signed by 187 countries.
35
patent
Grants the inventor of a new product or process exclusive rights to the manufacture, use, or sale of that invention.
36
political economy
Political, economic, and legal systems of a country.
37
political risk
Likelihood that political forces will cause drastic changes in a country’s business environment that adversely affect the profit and other goals of a particular business enterprise.
38
political system
System of government in a nation.
39
private action
Theft, piracy, blackmail, and the like by private individuals or groups.
40
privatization
Sale of state-owned enterprises to private investors.
41
product liability
Involves holding a firm and its officers responsible when a product causes injury, death, or damage.
42
product safety laws
Laws that set certain safety standards to which a product must adhere.
43
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 the resource.
44
public action
Extortion of income or resources from property holders by public officials, such as politicians and government bureaucrats.
45
purchasing power parity (PPP)
Adjustment in gross domestic product per capita to reflect differences in the cost of living.
46
representative democracy
Political system in which citizens periodically elect individuals to represent them in government.
47
right-wing totalitarianism
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.
48
social democrats
Those committed to achieving socialism by democratic means.
49
theocratic law
System of law based on religious teachings.
50
theocratic totalitarianism
Political system in which political power is monopolized by a party, group, or individual that governs according to religious principles.
51
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.
52
trademarks
Designs and names, often officially registered, by which merchants or manufacturers designate and differentiate their products.
53
tribal totalitarianism
Political system in which a party, group, or individual that represents the interests of a particular tribe (ethnic group) monopolizes political power.
54
United Nations Convention on Contracts for the International Sale of Goods (CISG)
Set of rules governing certain aspects of the making and performance of commercial contracts between sellers and buyers who have their places of business in different nations.
55
caste system
System of social stratification in which social position is determined by the family into which a person is born, and change in that position is usually not possible during an individual’s lifetime.
56
class consciousness
Tendency for individuals to perceive themselves in terms of their class background.
57
class system
System of social stratification in which social status is determined by the family into which a person is born and by subsequent socioeconomic achievements. Mobility between classes is possible.
58
Confucian dynamism
Theory that Confucian teachings affect attitudes toward time, persistence, ordering by status, protection of face, respect for tradition, and reciprocation of gifts and favours.
59
ethical systems
Cultural beliefs about what is proper behaviour and conduct.
60
ethnocentric behaviour
Behaviour that is based on the belief in the superiority of one’s own ethnic group or culture; often shows disregard or contempt for the culture of other countries.
61
folkways
Routine conventions of everyday life.
62
group
Association of two or more individuals who have a shared sense of identity and who interact with each other in structured ways on the basis of a common set of expectations about each other’s behaviour.
63
individualism versus collectivism
Theory focusing on the relationship between the individual and his or her fellows. In individualistic societies, the ties between individuals are loose and individual achievement is highly valued. In societies where collectivism is emphasized, ties between individuals are tight, people are born into collectives, such as extended families, and everyone is supposed to look after the interests of his or her collective.
64
karoshi
Japanese term meaning to die from overwork.
65
long-term versus short-term orientation
Theory that deals with virtue regardless of truth; values associated with long-term orientation are thrift and perseverance; values associated with short-term orientation are respect for tradition, fulfilling social obligations, and protecting one’s “face.”
66
masculinity versus femininity
Theory of the relationship between gender and work roles. In masculine cultures, sex roles are sharply differentiated and traditional “masculine values,” such as achievement and the effective exercise of power, determine cultural ideals. In feminine cultures, sex roles are less sharply distinguished, and little differentiation is made between men and women in the same job.
67
mores
Norms seen as central to the functioning of a society and to its social life.
68
norms
Social rules and guidelines that prescribe appropriate behaviour in particular situations.
69
power distance
Theory of how a society deals with the fact that people are unequal in physical and intellectual capabilities. High power distance cultures are found in countries that let inequalities grow over time into inequalities of power and wealth. Low power distance cultures are found in societies that try to play down such inequalities as much as possible.
70
social mobility
Extent to which individuals can move out of the social stratum into which they are born.
71
social strata
Hierarchical social categories often based on family background, occupation, and income.
72
uncertainty avoidance
Extent to which cultures socialize members to accept ambiguous situations and to tolerate uncertainty.
73
absolute advantage
A country has an absolute advantage in the production of a product when it is more efficient than any other country at producing it.
74
comparative advantage
Theory that a country should specialize in producing goods and services it can produce most efficiently even if this means buying goods from other countries that it could produce more efficiently itself. A country is said to have a comparative advantage in the production of such goods and services.
75
constant returns to specialization
Costs stay the same as specialization increases.
76
economies of scale
Cost advantages associated with large-scale production.
77
factor endowments
The amount of land, labour, capital, and entrepreneurship that a country possesses and can use for manufacturing.
78
free trade
Absence of barriers to the free flow of goods and services between countries.
79
first-mover advantages
Advantages accruing to the first to enter a market.
80
mercantilism
Economic philosophy advocating that countries should simultaneously encourage exports and discourage imports.
81
new trade theory
The theory that that in some cases, countries specialize in the production and export of particular products not because of underlying differences in factor endowments but because in certain industries the world market can support only a limited number of firms.
82
national competitive advantage
A theory put forward by Michael Porter that attempts to explain why particular nations achieve international success in particular industries. In addition to factor endowments, Porter points out the importance of country factors such as domestic demand and domestic rivalry in explaining a nation’s dominance in the production and export of particular products.
83
product life-cycle theory
Proposed by Raymond Vernon, this theory suggests that early in their life cycle, most new products are produced in and exported from the country in which they were developed. As a new product becomes widely accepted internationally, however, production starts in other countries. As a result, the theory suggests, the product may ultimately be exported back to the country of its original innovation.
84
zero-sum game
Situation in which an economic gain by one country results in a economic loss by another.
85
ad valorem tariff
Tariff levied as a proportion of the value of an imported good.
86
administrative trade policies
Bureaucratic rules adopted by governments used to restrict imports or boost exports.
87
anti-dumping policies
Policies designed to punish foreign firms that engage in dumping and thus protect domestic producers from unfair foreign competition.
88
countervailing duties
Anti-dumping duties.
89
dumping
Selling goods in a foreign market for less than their cost of production or below their “fair” market value.
90
export ban
A policy that partially or entirely restricts the export of a good.
91
export tariff
A tax placed on the export of a good in order to discriminate against exporting, to ensure that there is sufficient supply of a good within a country.
92
import quota
Direct restriction on the quantity of a good that can be imported into a country.
93
infant industry argument
An argument that governments should temporarily support new industries (with tariffs, import quotas, and subsidies) until they have grown strong enough to meet international competition.
94
local content requirement
Demand that some specific fraction of a good be produced domestically.
95
multilateral or bilateral trade agreements
Reciprocal trade agreements between two or more countries.
96
quota rent
The extra profit that producers make when supply is artificially limited by an import quota.
97
Smoot-Hawley Act
The Smoot-Hawley Act was introduced in the United States in 1930 to protect domestic industries and divert consumer demand away from foreign products. It introduced tariff barriers for almost every industry.
98
specific tariff
Tariff levied as a fixed charge for each unit of good imported.
99
strategic trade policy
The strategic trade policy argues that (1) by appropriate actions, a government can help raise national income if it can ensure that the firms that gain first-mover advantages in an industry are domestic rather than foreign enterprises; and (2) that it might pay a government to intervene in an industry by helping domestic firms overcome the barriers to entry created by foreign firms that have already reaped first-mover advantages.
100
subsidy
Government financial assistance to a domestic producer.
101
tariff
Tax levied on imports.
102
tariff rate quota
Under a tariff rate quota, a lower tariff rate is applied to imports within the quota than those over the quota.
103
voluntary export restraint (VER)
Quota on trade imposed from the exporting country’s side, instead of the importer’s; usually imposed at the request of the importing country’s government.
104
Accommodative stance
In taking this stance, a company exceeds its customers’ expectations.
105
business ethics
Accepted principles of right or wrong governing the conduct of business people.
106
Convention on Combating Bribery of Foreign Public Officials in International Business Transactions
The convention obliges member states to make the bribery of foreign public officials a criminal offence.
107
corporate social responsibility
The idea that managers of enterprises should consider the social consequences of economic actions when making business decisions.
107
defensive stance
Companies taking this stance deny responsibility for the cause of concern.
108
ethical dilemma
A situation in which there is no ethically acceptable solution.
109
ethical strategy
A course of action that does not violate a company’s business ethics.
110
external stakeholders
Individuals or groups who have some claim on a firm, such as customers, suppliers, and unions.
111
internal stakeholders
People who work for or who own the business such as employees, directors, and shareholders.
112
obstructionist stance
Companies taking this stance create barriers that make it difficult for customers to address their concerns.
113
organizational culture
The values and norms shared among an organization’s employees.
114
proactive stance
In taking this stance, companies respond to issues as soon as they arise and inform their customers of how they will be proceeding.
115
stakeholders
The individuals or groups who have an interest, stake, or claim in the actions and overall performance of a company.
116
Association of Southeast Asian Nations (ASEAN)
An attempt to establish a free trade area among Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.
116
Andean Community
A 1969 agreement among Bolivia, Chile, Ecuador, Colombia, and Peru to establish a customs union.
117
Canada-United States-Mexico Agreement
The "new NAFTA," CUSMA, is the new agreement signed by Canada, the United States, and Mexico on 30 November 2018 to replace the North American Free Trade Agreement (NAFTA).
118
Caribbean Single Market and Economy (CSME)
Unites six CARICOM members in agreeing to lower trade barriers and harmonize macroeconomic and monetary policies.
118
CARICOM
An association of English-speaking Caribbean states that are attempting to establish a customs union.
119
Central America Free Trade Agreement (CAFTA)
The agreement of the member states of the Central American Common Market joined by the Dominican Republic to trade freely with the United States.
120
Central American Common Market
A trade pact among Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua, which began in the early 1960s but collapsed in 1969 due to war.
121
common market
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) pursuing a common external trade policy; and (3) allowing factors of production to move freely among members.
122
Court of Justice
Supreme appeals court for EU law.
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