Exam Review Flashcards
International Business
Countries are dependent on each other to produce certain goods
Global Dependency
When items that consumers need and want are created in other countries. Ex. Drought and crops in Africa
Trade Barriers
Restrictions that reduce free trade among countries
Gross Domestic Product (GDP)
measures the output of goods that a country produces within its borders. It includes items produced with foreign resources
Gross National Product (GNP)
measures the total value of all goods and services produced by the resources of a country
Balance of Trade
is the difference between a country’s exports and imports. A trade surplus occurs when a nation exports more than it imports. Trade deficit is vice versa
Absolute Advantage
exists when a country can produce a good or service at a lower cost than other countries. Ex. Saudi has absolute advantage in oil
Comparative Advantage
A country specializes in the production of a good or service at which it is relatively more efficient
Economic System
is the method a country uses to answer the basic economic questions
Command Economy
the government or a central - planning committee regulates the amount, distribution, and price of everything produced. The government also owns the productive resources of that country
Market Economies
are those in which individual companies and consumers make the decision about what, how, and for whom items will be produced. It is also called capitalism
Private property
Individuals have the right to buy and sell productive re-sources and to own business enterprises
Profit motive
Individuals are inspired by the opportunity to be rewarding for taking business risks and for working hard
Free, competitive marketplace
Consumers have the power to use their choices to determine what is to be produced and to influence the prices to be changed
Mixed Economy
Economies are a blend between government involvement in business and private ownership
Privatization
The process of changing an industry from publicly to private
World Bank
is a bank whose major function is to provide economic assistance to less developed countries
International Monetary Fund (IMF)
is an agency that helps promote economic cooperation by maintain an orderly system of world trade and exchange rates
WTO (World Trade Organization)
Helps form relations and trade agreements with other nations
Trade Surplus
Occurs when a country exports more than it imports
Trade Deficit
Occurs when a country imports more than it exports
Monopoly
One seller controls the entire market for a product or service
Oligopoly
Has few sellers with slightly different product like car tires
What is the economy?
It is the means by which people organize the production of needed goods and services using the resources they have available
Demand
Two criteria must exist for there to be a demand for a product. Desire/want for the product/sense, Ability to pay
Supply
Is the amount businesses are willing to supply at different prices
Law of Demand
Price (up)-Demand (down), Price (Down)-Demand (up)
Law of Supply
Price (up) - Supply (up), Price (down) - Supply (down)
What is the economic problem ?
Scarcity vs. Unlimited wants and needs
What does scarcity mean?
The definition of scarcity in economics is the situation where limited resources cannot satisfy unlimited wants. What to produce?, How to produce it?, For whom to produce it?
Opportunity Cost
The cost of an alternative that must be forgone in order to pursue a certain action. Put another way, the benefits you could have received by taking an alternative action
Market Price
The point at which demand and supply cross
Equilibrium price
is when there is no inflation on a sale
Industrialized Country
a country with strong business activity that is usually the result of advanced technology and a highly educated population
Infrastructure
refers to a nation’s transport, communication, and utility systems
Less-Developed Country (LDC)
a country with little economic wealth and an emphasis on agriculture or mining. Sometimes these countries have abundant resources but no technology to make use of them
Developing Countries
They are evolving from less developed to industrialized . They are also known as emerging markets
Culture
is a system learned, shared, unifying, and interrelated beliefs, values, and assumptions
Subculture
is a subset of a larger culture. It may have some values, beliefs, and assumptions that are different than the larger culture of which it is a part
Cultural Baggage
is the idea that you can carry your beliefs, values, and assumptions with you at all times
Nuclear family
is a group that consists of a parent or parents and unmarried children living together. Developed countries use this
Extended family
is a group that consists of the parents, children and other relatives living together. Developing countries use this.
family unit
provides the early education for its younger members
Low-context culture
is one that communicates very directly, they interpret things literally
High-context culture
is one that communicates indirectly, they attach little value to the literal meanings and interpret data figuratively
Non verbal communication
is communication that does not allow the use of words
Individualism
is the belief in the individual and his or her ability to function relatively independently
Collectivism
is the belief that the group is more important than the individual
Ethnocentrism
is the belief that one’s culture is better than other cultures
Culture Shock
is a normal reaction to all the differences of another culture
Reverse Culture Shock
is your reaction to becoming reacquainted with your own culture after having accepted another culture
Social Responsibility
the process whereby people function as good citizens and are sensitive to their surroundings. To have the right to operate within a host country, a multinational enterprise must substantially benefit the host country
Expropriation
occurs when a government takes control and ownership of foreign-owned assets and companies
Economic Nationalism
refers to the trend of some countries to restrict foreign ownership of companies and to establish laws that protect against foreign imports
Sales Tax
a tax on the sale of a product, the consumer pays on the time of purchase
Excise Tax
a tax levied on the sale or consumption of specific products or commodities. It helps pay for upkeep on those products
Value Added Tax
a tax assessed on the increase in value of goods from each stage of production to final consumption
Soft Currency
A currency that is not easy to change to other currency
Hard Currency
is a monetary unit that is freely converted into another currency
Floating Exchange Rate
is a system in which currency values are based in supply and demand
Foreign Exchange
The process of converting the currency of one country into the currency of another country
3 Main Purposes of Money
Medium Exchange, Measure of Value, Store of Value
Medium Exchange
Money is useful only if people are willing to accept it in exchange for goods and services
Measure of Value
Money allows to put a value on various goods and services
Store of Value
Money can be saved for future spending
Exchange Rate
is the amount of currency of one country that can be traded for one unit of the currency of another country
Migrant Workers
People who move to another country for work. Their decisions are influenced by Need, Attractiveness and Accessibility
Labour Union
An organization of workers whose goal is improving members working conditions, wages and benefits. There has to be strength in numbers in order for this to work
Collective Bargaining
is negotiation between union workers and their employees on issues of wages, benefits, and working conditions. Managers do not have bargaining rights
Grievance Procedure
is the steps that must be followed to resolve a complaint by an employee, the union, or the employer
Strike
Occurs when employees refuse to work to force an employer to agree to certain demands
Lockout
Locking employees out of the workplace to force a union to agree to certain demands
International Marketing
Marketing activities among sellers and buyers in different countries
Market
The likely customers for a good or service in a certain geographic location
Consumer Market
Individuals and households who are the final users of goods and services
Organizational Market
Buyers who purchase items for resale or additional production
Marketing Mix
There are 4 factors. Product, price, distribution, promotion
Product
Refers to goods or services being offered for sale that satisfies consumer demand.
Price
The monetary value of a product agreed upon a buyer and a seller
Distribution
Involves the activities needed to physically move and transfer ownership of goods and services from producer to consumer
Promotion
Involves the marketing efforts that inform and persuade customers
Marketing Environment
All business activities are affected by four elements. Geography, Economic conditions, Social and cultural Influences and Political and Legal factors
Geography
Climate and terrain can affect the types of products sold and transportation methods used in another country
Economic Conditions
The value of a country’s currency usually affects the selling price, consumer demand, and profits on a product
Social and Cultural Influences
Tastes, Habits, Customs, and religious beliefs must be considered
Political and Legal Factors
Local political and legal factors also affect marketing decisions
Target Market
is the particular market segment that a company plans to serve
Quantitative Research
Large-scale surveys that collect numeric data used to study consumers
Qualitative Research
Using open-ended interview questions to obtain comments from consumers about their attitudes and behaviours
Product Line
An assortment of closely related products designed to meet the varied needs of target customers
Product Life Cycle
The stages that a product goes through from start to finish
