Global Environment

Question 1

describes a shift toward a more integrated world economy in which culture, ideas, and beliefs are exchanged in addition to goods, services, and resources.

Answer 1

globalization

Question 2

It is the only source of a particular product, good, or service. 2 if it is able to produce more of something than another entity while using the same amount of resources (factors of production).

Answer 2

Absolute advantage

Question 3

over another in producing a particular good or service if it can produce the good or service at a lower relative opportunity cost.

Answer 3

comparative advantage

Question 4

is the difference between the value of a country’s imports and its exports, as follows:

value of exports – value of imports =

Answer 4

balance of trade

Question 5

occurs when a nation imports more than it exports.

Answer 5

trade deficit

Question 6

the difference between the total flow of money coming into a country and the total flow of money going out of a country during a period of time.

Answer 6

balance of payments

Question 7

occurs when a nation exports more than it imports.

Answer 7

trade surplus

Question 8

a system of exchange in which goods and services are used as payment rather than money.

Answer 8

countertrade

Question 9

taking goods that were produced within a company’s home country and shipping them to another country.

Answer 9

exporting

Question 10

is the process by which a good is brought into a jurisdiction, especially across a national border, from an external source.

Answer 10

importing

Question 11

contracts out a business process to another party and may include either or both foreign and domestic contracting.

Answer 11

outsourcing

Question 12

is the actual relocation of a business process from one country to another—typically it’s an operational process, such as manufacturing, or sometimes a supporting process, such as accounting.

Answer 12

offshoring

Question 13

establishes a new business that is jointly owned by two or more otherwise independent businesses.

Answer 13

joint ventures

Question 14

is formed between two or more corporations, each based in their home country, for a specified period of time.

Answer 14

strategic alliance

Question 15

The most extreme form of trade restriction is the

Answer 15

embargo

Question 16

international financial institution that provides loans for capital programs to developing countries. It comprises two institutions: the International Bank for Reconstruction and Development (IBRD), and the International Development Association (IDA).

Answer 16

world bank

Question 17

is an international organization headquartered in Washington, D.C., comprised of 189 member countries. The IMF works to foster global growth and economic stability by providing policy, advice, and financing to its members. It also works with developing nations to help them reduce poverty and achieve macroeconomic stability.

Answer 17

International Monetary Fund (IMF)

Question 18

refers to a factory that is guilty of some sort of labor abuse or violation, such as unsafe working conditions, employment of children, mandatory overtime, payment of less than the minimum wage, unsafe working conditions, abusive discipline, sexual harassment, or violation of labor laws and regulations.

Answer 18

sweatshop

Question 19

While certain financial incentives, such as promises to invest in local infrastructure, may be legitimate, any form of direct payment to the foreign official that is intended to influence that official’s public decisions will cross the line into

Answer 19

bribery

Question 20

The first major international anticorruption law was the United States’

Answer 20

Foreign Corrupt Practices Act (FCPA)