IA Knowledge VIII Flashcards
Special government auditing standards published by the US Comptroller General.
Yellow Book
A group of five international organizations responsible for providing financing and advice to countries for economic development and elimination of poverty.
World Bank
An organization established by the General Agreement on Tariffs and Trade that administers trade agreements, provides a forum for negotiations, and handles disputes between trading partners.
World Trade Organization (WTO)
A situation in which firms voluntarily limit the amount of their exports to specific countries, generally to avoid more stringent trade barriers or the imposition of import quotas.
Voluntary export restrictions (VERs)
Situation in which an organization owns all of a foreign operation.
Wholly owned subsidiary
A circumstance where an organization owns and controls several different subsidiaries to promote cost and efficiency benefits.
Vertical integration
Teams that are dispersed geographically and primarily communicate via electronic methods.
Virtual teams
A period during which economic output is at its lowest level following a recession or depression.
Trough
Measured by dividing the number of people actively seeking employment by the total workforce.
Unemployment
A strategy in which an organization’s home and host countries are closely connected to operate on a worldwide basis.
Transnational strategy
A pricing agreement between two parties that allows a buyer or seller to trigger a particular pricing formula at the time of their choosing; a type of futures trading that allows the buyer and seller to protect themselves from anticipated price fluctuations.
Trigger pricing
The use or threat of violence for political reasons.
Terrorism
Corporations that span borders in their organizational structures; they play a significant role in world trade.
Transnational corporations (TNCs)
A smaller group of individuals that has been organized to accomplish a common purpose and performance objectives.
Team
The way organizations are able to capitalize on the use of technology and expand research and development and other capabilities through global telecommunication networks.
Technoglobalism
Policies that address factors that will, over time, increase the potential of full-capacity output of the economy.
Supply-side policies
Excise taxes imposed on the imports of particular goods or services.
Tariffs
Agreements between organizations from different countries to conduct business.
Strategic alliances
A type of unemployment that exists when there is enough demand to provide full employment but the types of demand don’t match the available labor force.
Structural unemployment
A process of developing several future alternatives, or scenarios, to help prepare for future uncertainties.
Scenario building
An assumption or generalization made about someone that is not reflective of the person.
Sterotype
A strategy that combines aspects of the multinational, international, and multilocal strategies; focus is on producing regional products with a regional value chain.
Regional stratey
Regulations regarding the minimum amount of resources that banks must hold against deposits.
Reserve requirements
A period characterized by an expansion in the economy during which employment and economic output increase.
Recovery
In terms of international operations, an orientation in which there is high coordination and communication within a specific region.
Regiocentric orientation
Government control of the quantity supplied of a specific item; used to ensure fair distribution of scarce resources.
Rationing
A period of at least six months after a peak and before a trough during which the economy declines as measured by gross domestic product.
Recession
The existence of barriers to free trade.
Protectionism
Study of perceptions of space and personal contact.
Proxemics
A legal minimum on the price of a good or service.
Price floor
The sale of a government-owned operation to a private investor.
Privatization
The cost of a product or service to the customer.
Price
A legal maximum on the price of a good or service.
Price ceiling
Any government or political action that would harm a country’s business environment.
Political risk
In terms of international operations, an orientation that gives much latitude to the host country to make decisions locally and direct operations.
Polycentric orientation
The potential benefits given up when one alternative is selected over another.
Opportunity costs
The point at which economic activity reaches a temporary maximum.
Peak
When the US Federal Reserve System buys or sells government securities (bonds, notes, and bills) in the open market from the public.
Open market operations
As related to risk, an uncertain event with a positive consequence.
Opportunity
A trade agreement that lowered trade barriers among the US, Mexico, and Canada.
North American Free Trade Agreement (NAFTA)
Quantities of foreign currencies held by the central bank of every nation.
Official reserves
A strategy in which the organizations in host countries are subsidiaries with their own control of operations.
Multilocal strategy
An organization that serves customers in various countries.
Multinational organization
A person who implements an organization’s strategy and provides the necessary structure for people and operations on a day-to-day basis.
Manager
A strategy in which the organizations in host countries are subsidiaries with their own control of operations.
Multidomestic strategy
The science of economic concerns on a national level.
Macroeconomics
A system in which the currency rate normally fluctuates according to supply and demand but is also supported by currency interventions by central banks in order to stabilize or alter rates.
Managed floating exchange rate system
An agreement between an organization and another party to, for example, use a technology or a patent.
Licensing
When individuals say things very directly and explicitly; the meaning is in the words they use and the specific situation is not as important to discern.
Low-context language
Agreements between two separate organizations to accomplish a single project together.
Joint ventures
An innovative thinking process to challenge the status quo and generate unconventional alternatives.
Lateral thinking
An international agency charged with promoting economic stability and preventing global depression by providing loans to usually stable countries during times of crisis.
International Monetary Fund (IMF)
A strategy in which an organization’s home country controls the value chain at home but still produces and markets global products.
International strategy
A set of standards required or permitted for use by over 115 countries (including supranational bodies such as the European Commission), created to provide harmony among the regulations and accounting standards related to financial reporting across national boundaries.
International financial reporting standards (IFRS)
Situation in which the organizations in a strategic alliance form a separate entity.
International joint venture (IJV)
A process designed to provide reasonable assurance regarding the achievement of objectives in the categories of effectiveness and efficiency of operations, reliability of financial reporting, and compliance with applicable laws and regulations.
Internal control
Being able to conduct transactions within a firm; facilitates transfer of technology from one branch of the company to another without selling the technology.
Internalization
The decrease in the purchasing power of money and the increase in the general price level for goods and services.
Inflation
The agreed-upon payment for use of resources.
Interest
The maximum amount of a good that may be imported to a country in a given time period.
Import quotas
When an organization buys products, supplies, or services from a foreign country.
Importing
The country where an organization’s headquarters are.
Home country
A foreign country that an organization conducts business in.
Host country
A situation in which members of a group make decisions without considering a range of alternatives and perspectives.
Groupthink
When individuals say things indirectly and implicitly; reading between the lines is important because the words could have different meanings and some things may be left unsaid.
High-context language
A strategy in which an organization can produce products or services anywhere from a global location.
Global strategy
The total market value of all goods and services produced in the economy in one year.
Gross domestic product (GDP)
The broad guidelines and specific procedures for accounting that have substantial authoritative support in the business community.
Generally Accepted Accounting Principles (GAAP)
In terms of international operations, an orientation in which there is strong interdependence between the home and host countries; the approach is to develop worldwide standards and objectives that serve both universal and local purposes.
Geocentric orientation
Increases in net assets (equity) due to incidental or peripheral transactions except those resulting from investments by or distributions to owners.
Gains
An agreement that sets forth binding tariffs between member countries; generally means that the countries cannot raise their tariffs from the agreed-upon levels.
General Agreement on Tariffs and Trade (GATT)
The absence of artificial barriers to trade among different nations.
Free trade
The amount of unemployment due to the normal workings of the labor market.
Frictional unemployment
A type of license whereby use of an entire business is licensed.
Franchising
Falsified reporting designed to mislead financial statement users, usually by understating or overstating assets/liabilities or revenues/expenses.
Fraudulent financial reporting
A planning tool to identify forces for and against change to help make better decisions.
Force field analysis
A situation in which an international organization owns part or all of an operation in another country.
Foreign direct investment (FDI)
A system in which the exchange rates for currencies are determined by market supply and demand as are the prices of other financial assets such as stocks and bonds.
Floating exchange rate
Sets a minimum value for an adjustable interest rate.
Floor
The central banking system of the US; uses monetary policy to help the economy achieve full-employment GDP.
Federal Reserve System (the Fed)
A system in which the exchange rates for currencies are determined by market supply and demand as are the prices of other financial assets such as stocks and bonds.
Flexible exchange rate
When an organization sells its products or services to foreign customers, either directly or indirectly through an intermediary.
Exporting
The situation in which a country takes over an organization’s assets without adequate compensation.
Expropriation
A specific cash amount levied on a particular commodity, such as liquor.
Excise tax
Payments a government makes to a business that exports goods; the firm will export the good up to the point at which the domestic price exceeds the foreign price by the amount of the subsidy.
Export subsidies
The banking system that is made up of the European Central Bank and the local central banks of the 27 member states of the European Union.
European System of Central Banks (ESCB)
A customs and economic union of 27 (as of January 2012) independent, democratic European countries (called member states) supporting free trade and fixed exchange rates.
European Union (EU)
The executive body of the European Union.
European Commission (EC)
The European Union’s financing institution; provides financing for capital investment furthering European Union policy objectives.
European Investment Bank (EIB)
In terms of international operations, an orientation in which the home country headquarters largely controls home country and host country operations.
Ethnocentric orientation
The bank that is responsible for monetary policy covering the 13 member countries of the European Union that have adopted the euro as their currency.
European Central Bank (ECB)
An increase in real gross domestic product over a period of time.
Economic growth
Any economic statistic, such as the unemployment rate, GDP, or the inflation rate, that indicates how well the economy is doing and how well it will do in the future.
Economic indicatior
The situation in which a host county acquires more ownership of a foreign business.
Domestication
Situation in which an exporter sells a product for less in a foreign country than the product sells for in the domestic market; designed to drive competitors out of an industry and then allow the exporter to raise its prices to make a profit.
Dumping
The interest rate on loans that the Federal Reserve makes to commercial banks.
Discount rate
Accepting and respecting individual differences and being inclusive of such things as different backgrounds, values, beliefs, experiences, and skills.
Diversity
An increase in aggregate demand that pulls up the price level.
Demand-pull inflation
Attempt to eliminate or reduce the severity of recessions, or maintain growth at a noninflationary pace, through active fiscal and monetary policy.
Demand-side policies
The ability to understand and communicate effectively across cultures.
Cultural intelligence
A type of unemployment caused by ups and downs in the business cycle, specifically by a lack of demand for labor.
Cyclical unemployment
An increase in production costs that reduces supply and increases prices.
Cost-push inflation
An in-kind trade made between parties, typically through a trading organization.
Countertrade
A measure of the collective changes in the cost of living for the average consumer household.
Consumer price index (CPI)
A licensing agreement whereby an organization manufactures for a foreign market.
Contract manufacturing
Situation in which a party’s opportunity cost for producing a good or service, in comparison to that of other goods and services it can apply its resources toward, is lower than the opportunity cost for other parties.
Comparative advantage
Situation in which a country takes over the assets of an organization.
Confiscation
The continuous process of planning and directing changes that occur within an organization to achieve an intended result.
Change management
A two-way transfer of information between a sender and a receiver; can be verbal, written, or nonverbal.
Communication
A regular pattern of expansion (recovery) and contraction (recession) in the level of economic activity.
Business cycle
The accumulated resources of an organization raised through debt and equity financing and through the organization’s productive efforts.
Capital
The way we interpret verbal or nonverbal messages by our own references.
Attribution
An activity in which a group generates new ideas; ideas are accepted without criticism and are then evaluated together.
Brainstorming
