Test #2 Flashcards
Memorizing Chapter 3-7 key-terms
What’s gross national income (GNI) or GDP
Chapter 3
Economic measurement
Measures the total monetary or market value of all the finished goods and services produced within a country’s borders in a specific time period. (C + I + G + NX)
Define Purchasing Power Parity (PPP)
Chapter 3
GDP relationship
Adjustment in gross domestic product per capita to reflect differences in the cost of living.
Tell me about Human Development Index (HDI)
Chapter 3
Factors
Attempt by the United Nations to assess the impact of a number of factors on the quality of human life in a country.
What’s innovation?
Chapter 3
Development
Development of new products, processes, organizations, management practices, and strategies.
What’s the primary role for entrepreneurs?
Chapter 3
In relation to first-mover advantage
Those who first commercialize innovations.
Define the word deregulation.
Chapter 3
Business conducting
It is the removal of government restrictions concerning the conduct of a business.
First-mover advantages vs. Late-mover disadvantages
Chapter 3
Advantages accruing to the first to enter a market vs. Handicaps experienced by being a late entrant in a market.
What’s political risk?
Chapter 3
Political shifts disrupting a country’s business, hurting a firm’s profits.
What’s economic risk?
Chapter 3
Business relationship
Economic mismanagement disrupting a country’s business, hurting a firm’s profits.
What’s legal risk?
Chapter 3
Thinking ahead
The likelihood that a trading partner will opportunistically break a contract or expropriate intellectual property rights.
What’s the cross-cultural literacy?
Chapter 4
Understanding how the culture of a country affects the way business is practiced.
Define the word culture.
Chapter 4
System of values and norms that are shared among a group of people and that when taken together constitute a design for living.
Define the term values.
Chapter 4
Abstract ideas about what a society believes to be good, right, and desirable.
Define the word norms.
Chapter 4
Social rules and guidelines that prescribe appropriate behavior in particular situations.
What’s a society?
Chapter 4
Group of people who share a common set of values and norms.
Define the folkways.
Chapter 4
Routine conventions of everyday life.
What are mores?
Chapter 4
In relation to norms
Norms seen as central to the functioning of a society and to its social life.
What is a social structure?
Chapter 4
The basic social organization of a society.
Define what is a group in relation to IB.
Chapter 4
An 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 behavior.
What is social strata?
Chapter 4
Hierarchical social categories often based on family background, occupation, and income.
What is social mobility?
Chapter 4
The extent to which individuals can move out of the social strata into which they are born.
Define the term caste system.
Chapter 4
A 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 possibleduring an individual’s lifetime.
What’s a class system?
Chapter 4
A 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.
Tell me about the class consciousness.
Chapter 4
Tendency for individuals to perceive themselves in terms of their class background.
What is a religion?
Chapter 4
A system of shared beliefs and rituals concerned with the realm of the sacred.
Define the word ethical system.
Chapter 4
A set of moral principles, or values, that is used to guide and shape behavior.
What’s the power distance? (Hofstede’s work)
Chapter 4
Balancement
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.
Individualism versus collectivism? (Hofstede’s work)
Chapter 4
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.
Define the term uncertainty avoidance? (Hofstede’s work)
Chapter 4
Extent to which cultures socialize members to accept ambiguous situations and to tolerate uncertainty.
Masculinity vs. Femininity? (Hofstede’s work)
Chapter 4
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.
Long-term versus short-term orientation (Hofstede’s work)
Chapter 4
Theory of the extent to which a culture programs its citizens to accept delayed gratification of their material, social, and emotional needs. It captures attitudes toward time, persistence, ordering by status, protection of face, respect for tradition, and reciprocation of gifts and favors.
What’s the word ethnocentrism?
Chapter 4
Behavior 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.
Define the term ethics?
Chapter 5
Accepted principles of right or wrong that govern the conduct of a person, the members of a profession, or the actions of an organization.
What are the business ethics?
Chapter 5
Accepted principles of right and wrong governing the conduct of businesspeople.
What’s an ethical strategy?
Chapter 5
Course of action that does not violate a company’s business ethics.
Foreign Corrupt Practices Act (FCPA)
Chapter 5
U.S relation
U.S. law regulating behavior regarding the conduct of international business in the taking of bribes and other unethical actions.
Convention on Combating Bribery of Foreign Public Officials in International Business Transactions(OECD)
Chapter 5
OECD convention that establishes legally binding standards to criminalize bribery of foreign public officials in international business transactions and provides for a host of related measures that make this effective.
What’s an ethical dilemma?
Chapter 5
Situation in which there is no ethically acceptable solution.
Define the term organizational culture?
Chapter 5
Values and norms shared among an organization’s employees.
What’s cultural relativism?
Chapter 5
Belief that ethics are culturally determined and that firms should adopt the ethics of the cultures in which they operate.
Define the term righteous moralist.
Chapter 5
Mr. Moral
One who claims that a multinational’s home-country standards of ethics are the appropriate ones for companies to follow in foreign countries.
What’s naive immoralist?
Chapter 5
Pitching the ball on the other camp.
One who asserts that if a manager of a multinational sees that firms from other nations are not following ethical norms in a host nation, that manager should not either.
What’s utilitarian approaches to ethics?
Chapter 5
These hold that the moral worth of actions or practices is determined by their consequences.
What are Kantian ethics?
Chapter 5
Belief that people should be treated as ends and never as means to the ends of others.
Define what are the rights theories.
Chapter 5
Ethics
Twentieth-century theories that recognize that human beings have fundamental rights and privileges that transcend national boundaries and cultures.
What’s the Universal Declaration of Human Rights?
Chapter 5
U.N
United Nations document that lays down the basic principles of human rights that should be adhered to.
Define the term just distribution.
Chapter 5
Distribution of goods and services that is considered fair and equitable.
What’s a code of ethics?
Chapter 5
A business’ formal statement of ethical priorities.
What are stakeholders?
Chapter 5
Individuals or groups who have an interest, stake, or claim in the actions and overall performance of a company.
Difference between internal stakeholders vs. external stakeholders?
Chapter 5
People who work for or own the business such as employees, directors, and stockholders vs. Individuals or groups that have some claim on a firm such as customers, suppliers, and unions.
What’s the concept of corporate social responsibility (CSR)?
Chapter 5
In relation to business
Idea that businesspeople should consider the social consequences of economic actions when making business decisions and that there should be a presumption in favor of decisions that have both good economic and social consequences.
What are the sustainable strategies about?
Chapter 5
Strategies that not only help the multinational firm make good profits but that do so without harming the environment, while simultaneously ensuring that the corporation acts in a socially responsible manner with regard to its multiple stakeholders.
What is the precautionary principle?
Chapter 5
In relation to the collection of data
When scientific understanding of an action’s effects is limited, unclear, or uncertain, and initial evidence suggests it might harm the environment, humans, animals, or plants, we should avoid or delay that action until we know more.
What’s a free trade about?
Chapter 6
The absence of barriers to the free flow of goods and services between countries.
Define the term new trade theory.
Chapter 6
In relation to first-mover advantage
The observed pattern of trade in the world economy may be due in part to the ability of firms in a given market to capture first-mover advantages.
What are factor endowments?
Chapter 6
A country’s endowment with resources such as land, labor, and capital.
Define the word mercantilism.
Chapter 6
In relation to philosophy
An economic philosophy advocating that countries should simultaneously encourage exports and discourage imports.
What’s a zero-sum game?
Chapter 6
Pitching the ball on the other camp
A situation in which an economic gain by one country results in an economic loss by another.
Define the term absolute advantage.
Chapter 6
In relation to production
A country has an absolute advantage in the production of a product when it is more efficient than any other country at producing it.
What are constant returns to specialization?
Chapter 6
The units of resources required to produce a good are assumed to remain constant no matter where one is on a country’s production possibility frontier.
What are economies of scale?
Chapter 6
Cost advantages associated with large-scale production.
Define the term balance-of-payments accounts.
Chapter 6
National accounts that track both payments to and receipts from foreigners.
What is the current account?
Chapter 6
In the balance of payments, records transactions involving the export or import of goods and services.
What is the current account deficit vs. current account surplus?
Chapter 6
( >/ = /< )
The current account of the balance of payments is in deficit when a country imports more goods, services, and income than it exports. The current account of the balance of payments is in **surplus **when a country exports more goods, services, and income than it imports.
Define the word capital account?
Chapter 6
In the balance of payments, records transactions involving one-time changes in the stock of assets.
Define the term financial account?
Chapter 6
In the balance of payments, transactions that involve the purchase or sale of assets.
What is a free trade?
Chapter 7
The absence of barriers to the free flow of goods and services between countries.
General Agreement on Tariffs and Trade (GATT)
Chapter 7
International treaty that committed signatories to lowering barriers to the free flow of goods across national borders and led to the WTO.
Chapter 7
Define the term import tariff.
Chapter 7
A tax levied on imports of goods or services.
What is specific tariff?
Chapter 7
A tariff levied as a fixed charge for each unit of good imported.
Define the word ad valorem tariff.
Chapter 7
A tariff levied as a proportion of the value of an imported good.
What are export tariffs?
Chapter 7
A tax placed on the export of a good.
Define the use of the term export ban.
Chapter 7
A policy that partially or entirely restricts the export of a good.
What is a subsidy?
Chapter 7
Government financial assistance to a domestic producer.
What are import quotas?
Chapter 7
A direct restriction on the quantity of a good that can be imported into a country.
Define the word tariff rate quota.
Chapter 7
Lower tariff rates applied to imports within the quota than those over the quota.
Voluntary export restraint (VER)
Chapter 7
A 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.
What is a quota rent?
Chapter 7
Extra profit producers make when supply is artificially limited by an import quota.
Local content requirement (LCR)
Chapter 7
A requirement that some specific fraction of a good be produced domestically.
What are administrative trade policies?
Chapter 7
Government bureaucratics
Administrative policies, typically adopted by government bureaucracies, that can be used to restrict imports or boost exports.
Define the term dumping.
Chapter 7
Selling goods in a foreign market for less than their cost of production or below their “fair” market value.
Define the word antidumping policies. (Antidumping duties)
Chapter 7
Designed to punish foreign firms that engage in dumping and thus protect domestic producers from unfair foreign competition.
What’s an infant industry argument?
Chapter 7
Infant industry = new industry
New industries in developing 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.
Define the term strategic trade policy.
Chapter 7
Government policy aimed at improving the competitive position of a domestic industry and/or domestic firm in the world market.
What’s the Smoot-Hawley Act?
Chapter 7
Enacted in 1930 by the U.S. Congress, this act erected a **wall of tariff barriers against imports **into the United States.
Define the term multilateral or bilateral trade agreements.
Chapter 7
Reciprocal trade agreements between two or more partners.
