Term
What are the 5 drivers of globalization? |
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Definition
- political
- technological
- market
- cost
- competitive
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Term
According to the text, there are 2 main motives for an intrnational firm to enter a foreign market. What are they? |
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Definition
Main motives for an international firm to enter foreign markets:
(1) the desire to increase profits and sales or
(2) the desire to protect profits and sales from being eroded by competitors.
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Term
Which three countries lead the world in both imports and exports? |
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Definition
China is the leading exporter, while the U.S. is the leading importer. |
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Term
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Definition
An economic philosphy based on the belief that:
(1) a nations wealth depends on accumulated treasure
(2) to increase wealth, government policies should promote exports and discourage imports |
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Term
What is absolute advantage? |
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Definition
The theory that a nation has absolute advantage when it can produce a larger amount of a good or service for the same amount of inputs as can another country, or when it can produce the same amount of goods or services using fewer inputs than another country |
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Term
What is comparative advantage? |
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Definition
The theory that a nation having an absolute disadvantage in the production of two goods with respect to another nation has a comparative or relative advantage in the production of the good in which its absolute disadvantage is less
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