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UNIT 1 Flashcards

1
Q

What is international business?

A
  • legitimate
  • business activity
  • national boundaries
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2
Q

Why do companies go international?

A
  1. cheap labor
  2. availability of resources
    - raw materials
    - labor/manpower
    - management
    - technology
  3. market expansion/emergence of new markets
  4. to compete (globally)
  5. to maximize profits
  6. foreign competition
  7. global competition
  8. tax incentives
    9, avoiding exposure to competitors
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3
Q

the period in the 18th and 19th centuries which, in Western
Eurpe, was characterized by rapid industrialization and the widespread mechanization of production processes

A

Industrial revolution

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4
Q

period in the industrial revolution

A

18th and 19th centuries

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5
Q

T or F. Industrial Revolution – the period in the 18th and 19th centuries which, in North America, was characterized by rapid industrialization and the widespread mechanization of production processe

A

F, Western Europe

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6
Q

improved recording and bookkeeping

A

Commercial documents

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7
Q

the use of commercial and investment papers (e.g. bills of exchange, checks)

A

Commercial documents

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8
Q

Commercial law is the improved recording and bookkeeping; the use of commercial and investment papers

A

F, commercial documents

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9
Q

fair practice by traders to protect the interests of the parties
involved

A

Commercial law

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10
Q

it is because of _______ that goods are able to move
at a faster pace from one nation to another

A

commercial banks (banking institutions)

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11
Q

Example is the use of commercial letters of credit as a means of financing foreign trade shipments

A

Banking institutions

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12
Q

simply a domestic port open to both foreign and coastwise
trade

A

Ports of Entry

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13
Q

T or F. In the Philippines, all articles imported into the country whether subject to duty or not shall not be entered through a customhouse at a port of entry

A

F, shall be entered

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14
Q

a doctrine which demand the minimum interference by the government in economic and political affairs

A

Laissez faire

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15
Q

operate exclusively within a single country

A

Domestic

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16
Q

T or F. Domestic is when it operates exclusively within a single country (host country)

A

F, home country

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17
Q

operate within a geographically defined region that
crosses national boundaries

A

Regional exporter

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18
Q

manufacturing and assembly, marketing and sales are decentralized beyond the home region

A

International

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19
Q

key decisions are made and coordinated from a central office

A

International

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20
Q

T or F. International is centralized.

A

F, decentralized

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21
Q

companies run independent and mainly self-sufficient subsidiaries in a range of countries

A

Multinational

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22
Q

T or F. In multinational, operations are standardized.

A

T

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23
Q

highly decentralized organization operating across a broad range of countries

A

Global

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24
Q

Almost all functions (R&D, manufacturing, marketing and sales) are performed in the location around the world.

A

Global

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25
most common, most fundamental, largest type of international business
International trade
26
Visible physical goods or commodities move between countries as export or import
International trade
27
grants a foreign firm the right to use intangible or intellectual property for a specific period of time in return for a royalty
Licensing
28
T or F. Licensing takes place when a licensor grants a foreign firm the right to use tangible or intellectual property for a specific period of time in return for a royalty
F, intangible
29
a parent company grants another company or firm the right to do business in a prescribed manner
Franchising
30
there is movement of capital, personnel and other assets
Direct investment
31
much greater level of control over the project or enterprise
Direct investment
32
Form and Method - Past ____, Present _____
Simple, Complex
33
Importance - Past _____, Present _____
Seemingly unimportant, very important
34
Purpose - Past ____, Present _____
Capitalizing on new opportunities, vital for survival
35
Infra that supports IB - Past ____, Present ____
Non-motivating, motivating
36
Capital - Past ____, Present ____
Scarce, easier access to funds and resources
37
Production - Past ____, Present ____
Limited, very high production
38
they are the principal instruments in the expansion of business on an international scale
Multinational Corporations
39
T or F. In MNCs, control production facilitates in more than one country
T
40
percentage of profits outside the home country for it to be considered an MNC
more than 25 percent
41
the person behind the statement “firms that control operations in at least six countries” under the MNC
Raymond Vernon
42
it is a firm that is structured so that business is conducted or ownership is held across a number of countries or that is organized into global product divisions
Multinational Corporations
43
T or F. Firms that participate in IB solely by exporting or licensing technology are multinational.
F, not multinational
44
For firms to become global, they make themselves home in three biggest markets namely _____
North America, Europe, Asia
45
T or F. There is a need to develop new products for the whole world for foreign firms to become global.
T
46
The term for making global decisions on strategic decisions but letting local units decide tactical questions along packaging, marketing and advertising
Glocalize
47
An example of parochial attitude
Not invented here syndrome
48
T or F. One of the ways for foreign firms to become global is to open senior ranks to foreign employees.
T
49
T or F. In markets that firms cannot penetrate, they find allies
T
50
Contributions of MNCs to host countries
1. They contribute to output and employment 2, They contribute to balance of payments 3. Technology transfer 4. Increased productivity and employment 5. Transfer of human capital 6. Increased choice for locals
51
Benefits derived by MNCs
1. Superior technical know-how 2, Large size and economies of scale 3. Lower input cost 4. Brand image and goodwill advantage 5. Access to low cost financing 6. Financial flexibility - transfer pricing 7. Information advantage 8. Management experience and expertise 9. Diversification of risk
52
the price of a foreign currency that one dollar can buy is ____
Exchange rate
53
it makes importation expensive but stimulates export
Weaker currency
54
a problem encountered by MNCs that talks about exchange rate and weaker currency
Business risks
55
government policies that restrict international trade to help domestic industries
Protectionism
56
Reasons why host countries adopt protectionist policies
a. Protection of an infant industry. b. Protection of home market. c. The need to keep the money at home. (local currency/foreign reserves) - US d. Encouragement of capital accumulation. e. Conservation of natural resources. f. Industrialization of a low-wage nation. g. Maintenance of employment and reduction of unemployment. h. National security. i. Increase of business size. j. Retaliation and bargaining.
57
the transformation of a society from an agrarian economy to an industrial one
Industrialization
58
Trade Barriers
1. Tariff 2. Quota 3. Voluntary export restraints 4, Boycotts and embargoes 5. Inconvertible currency. non convertible/blocked currency 6. Host country’s standards along health, safety and product quality 7. Antidumping penalties
59
tax or duty imposed by a government on imported or exported goods
Tariff
60
two purposes of tariffs
protecting domestic industries from foreign competition and generating revenue for the government
61
tariffs are used for various purposes, which includes three namely:
a) according to purpose (protective and revenue) b) according to what is being taxed (import and export) c) according to how the duty amount is valued (ad valorem, specific duty and compound duty)
62
latin term which means according to value or in proportion to the value; based on a fixed percentage of the value of the good
Ad valorem
63
tax imposed on a stipulated amount per unit weight or some other measure of quantity
Specific Duty
64
combination of ad valorem and specific duty
Compound duty
65
a specific unit or peso limit applied to a particular type of good
Quota
66
country imposes absolute restriction against the purchase and importation of certain goods from other countries
Boycott
67
refusal to sell to a specific country
Embargo
68
money in which exchanges into another country's currency is not allowed
Inconvertible currency, non-convertible or blocked currency
69
Reasons why product quality standards are imposed
• satisfy the customers’ quality requirements; • ensure that the products and services are safe; • comply with regulations; • meet environmental objectives; • protect products against climatic or other adverse conditions; and • ensure that internal processes are defined and controlled
70
selling exports at a price that is less than “normal value.”
Product Dumping
71
Problems encountered by MNCs
Business Risks Host country regulations and policies Different legal systems Operational difficulties Cultural difficulties
72
satisfy both the regulations of the home country and host country
legitimate
73
T or F. Intention is not necessary for it to be called international business.
F, there must be intention
74
A country/continent that provide the cheapest labor
African Continent
75
A country/continent that provide the highest pay (mean salary)
European countries
76
Something which we cannot copy
Absolute advantage
77
movie out to a country where competition is luxier
Market Expansion
78
this is to bar potential competitors
Hedging
79
A niche under maximization of profits
lesser level of competition
80
take advantage of tax holiday
Tax incentives
81
4IR means ____
Fourth Industrial Revolution
82
4 examples under banking institutions
- multi - interbank - payment - system
83
there are only two ports of entry, what are these?
airport and seaport
84
there is artificial shortage of supplies
Smuggled goods
85
this is the reason behind the success of first world countries that is not observed in the Philippines
continuity of programs and plans
86
3 regional exporters
NAFTA LAFTA ASEAN
87
research and development is decentralized
Global
88
this occurs when there are more exports than imports
Trade surplus
89
this occurs when there are more imports than exports
Trade deficit
90
everything is provided for by the HQ to the host country
Direct investment
91
MNCs have something to do with _____
regulation
92
three freely convertible currencies
dollar, euro, yen
93
it depends on the volume of transaction
Balance of payment
94
T or F. Balance of payment is reciprocal
F, not reciprocal
95
higher production, lesser cost per unit
Economies of scale
96
T or F. Depreciation on the part of the exporter is a disadvantage.
F, advantage
97
T or F. Appreciation on the part of the importer is a disadvantage.
F, advantage
98
T or F. Protectionism is an absolute advantage
T
99
T or F. MNCs are prohibited from localizing their products
F, not prohibited
100
movement of foreign currency
Balance of payments
101
is foreign currency going out an import or an export?
export
102
if we have much foreign currencies by bsp, we have ___
BOP surplus
103
one reason why we allow peza zones
technology transfer
104
this is prohibited by law as it includes bribery for private or personal gain
booty capitalism
105
T or F. exporter’s pov: peso depreciates, positive effect
T
106
T or F. peso appreciates, negative effect
T

BA 60 (3 decks)

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