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Global Competition & International Business
Final
123
Business
Undergraduate 4
04/30/2013

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Term
Collectively, we refer to political, economic, and legal systems as constituting the _____ economy of a country, thus reflecting how these systems are interdependent.
Definition
political
Term
In some cultures in Asia and the MIddle East, it is considered appropriate to give precedence to "the common good" over what may benefit individuals. These cultures can be termed ________
Definition
collectivist
Term
Followers who commit themselves to achieving socialism through democratic means are:
Definition
social democrats
Term
The sale of state-owned enterprises to private investors is referred to as:
Definition
privatization
Term
Which of the following can be traced to the ancient Greek philosopher, Aristotle? {Collectivism, Socialism, Individualism, Totalitarianism}
Definition
Individualism
Term
In a pure ______ economy, the government plans the goods and services that a country produces, the quantity in which they are produced, and the prices at which they are sold.
Definition
command
Term
A _____ law system is based on a very detailed set of laws organized into codes.
Definition
civil
Term
Contracts drafted under a common law framework tend to be ____, while those drafted under civil law tend to be _____.
Definition
very detailed, less specific.
Term
When contract disputes arise in international trade, there is always the question of which country's laws to apply. To resolve this issue, a number of countries, including the United States, have ratified the _______, which establishes a uniform set of rules governing certain aspects of the making and performance of everyday commercial contracts between sellers and buyers who have their places of business in different nations.
Definition
United Nations Convention on Contracts for the International Sale of Goods
Term
Economic evidence suggests that high levels of corruption ______ the foreign direct investment, level of international trade, and economic growth rate in a country. {increases, decreases, seldom effects, is not a factor in}
Definition
can significantly reduce
Term
As a result of ______ protection, the Nike "swoosh" logo is protected from being used by any other shoe manufacturer.
Definition
Trademark
Term
________ and _________ can be considered as the engines of long-run economic growth.
Definition
Innovation, entrepreneurial activity
Term
Which of the following is an advantage of a market economy? {Any individual who has an innovative idea is free to try to make money out of that idea by starting a business, The state owns all means of production, Commercialization of innovative new products is prevented, It is the state ,rather than the individual, that captures most of the gains}
Definition
Any individual who has an innovative idea is free to try and make money out of that idea by starting a business
Term
The absence of a legal system that protects property rights and the machinery to enforce that system usually results in: {the raising of barriers to FDI and international trade, a collectivist approach to business and commerce, a reduction in the incentive to engage in productive economic activity, deregulation and privatization of the economy}
Definition
a reduction in the incentive to engage in productive economic activity
Term
The likelihood that a trading partner will opportunistically break a contract or expropriate property rights is called:
Definition
legal risk
Term
Ethical issues in international business are often rooted in the fact that political systems, law, economic development and culture of nations vary significantly.
Definition
true
Term
Ethical practices of all nations are similar in nature.
Definition
false
Term
Environmental regulations are similar across developed and developing nations.
Definition
false
Term
The _____ occurs when a resource is shared by all, but owned by no one is overused by individuals, resulting in its degradation.
Definition
Tragedy of the commons
Term
The Foreign Corrupt Practices Act outlawed the paying of bribes to foreign government officials to gain business.
Definition
True
Term
Facilitating payments are permitted under the amended Foreign Corrupt Practices Act
Definition
True
Term
The idea that business people should consider the social consequences of economic decisions when making business decisions and that there should be a presumption in favor of decisions that have both good economic and social consequences is known as
Definition
Social responsibility
Term
Ethical dilemmas exist because of all of the following reasons except
Definition
doing the right thing or knowing what the right thing might be is often far too easy
Term
The Friedman doctrine suggests that
Definition
Businesses should not undertake social expenditures beyond those mandated by the law and required for the efficient running of a business
Term
Cultural relativism suggests that
Definition
Ethics are nothing more than the reflections of culture and that a firm should adopt the ethics of the culture in which it is operating
Term
Child labor is permitted and widely employed in Country X. A multinational company entering Country X decides to eploy minors in its subsidiary, even though it is against the multinational's home country ethics. Which approach to business ethics justifies the actions of the multinational company?
Definition
cultural relativism
Term
The righteous moralist suggests that
Definition
A multinational's home country standards of ethics are the appropriate ones for companies to follow in foreign countries
Term
The ______ approach 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.
Definition
Naive immoralist
Term
The utilitarian approach to business ethics suggests that
Definition
The moral worth of actions or practices is determined by their consequences
Term
Tools to assess actions such as cost-benefit analysis and risk assessment are rooted in the _____ philosophy.
Definition
Utilitarian approach
Term
The Kantian approach to ethics suggests that
Definition
People should be treated as ends and never purely as means to the ends of others
Term
Rights theories suggest that
Definition
human beings have fundamental rights and privileges that transcend national boundaries
Term
The Universal Declaration of Human Rights, related to employment, upholds all of the following, except: {prohibition of trade unions, equal pay for equal work, protection against unemployment, just and favorable work conditions}
Definition
Prohibition of trade unions
Term
Justice theories of business ethics focus on
Definition
The attainment of a just distribution of economic goods and services
Term
According to John Rawls, each person be permitted the maximum amount of basic liberty compatible with a similar liberty for others.
Definition
True
Term
Managers of international business can do all of the following to make sure ethical issues are considered in business decisions except
Definition
make sure that leaders within the business do not articulate the rhetoric of ethical behavior
Term
___________ means standing in the shoes of the stakeholder and asking how a proposed decision might impact that stakeholder.
Definition
Moral imagination
Term
_______ enables managers to walk away from a decision that is profitable, but unethical.
Definition
moral courage
Term
Considered to be the first theory of international trade, the principal assertion of ______ was that gold and silver were the mainstays of national wealth and essential to vigorous commerce.
Definition
mercantilism
Term
According to Smith, countries should specialize in the production of goods for which they have an absolute advantage and then
Definition
trade these goods for goods produced by other countries.
Term
A country is said to have an ________ in the production of a product when it is more efficient than any other country in producing that product.
Definition
absolute advantage
Term
Country A specializes in producing beef more efficiently than any other country. It buys wheat, which it produces less efficiently than beef, from country B, even though it produces more wheat more efficiently than itself. This situation is referred to as:
Definition
comparative advantage
Term
According to the Hecksher-Ohlin theory, the pattern of international trade is determined by differences in
Definition
factor endowments
Term
The difference between Ricardo's theory and the Hecksher-Ohlin theory is that they attributed the rise of comparative advantage to differences in _____ and _____, respectively.
Definition
productivity, factor endowments
Term
Vernon's product life-cycle theory was based on the observation that for most of the 20th century, a very large proportion of the world's new products had been developed by US firms and sold first in the _________ market.
Definition
U.S.
Term
The _____ theory began to emerge in the 1970's when some economists pointed out the ability of firms to attain economies of scale might have important implications for international trade.
Definition
new trade
Term
According to the new trade theory, countries whose firms establish a ______ advantage with regard to the production of a particular new product may subsequently dominate global trade in that product.
Definition
first-mover
Term
Porter's suggested four attributes making up the "diamond" consists of factor endowments, relating and supporting industries, firm strategy and structure, and:
Definition
demand conditions
Term
According to Porter's diamond, a nations position in elements of production such as skilled labor or the infrastructure necessary to compete in a given industry is best referred to as:
Definition
factor endowments
Term
Sophisticated and demanding local customers in Scandinavia helped push Nokia of Finland and Ericsson of Sweden to invest in cellular phone technology long before demand for cellular phones took off in other developed nations. This underscores Porter's point about how:
Definition
home demand plays an important role in upgrading competitive advantage.
Term
Globalization refers to the shift toward a more integrated and interdependent world economy.
Definition
True
Term
Sony Corporation sources goods and services for its electronic products from different locations around the globe in an attempt to take advantage of differences in the cost and quality of factors of production. This practice is made possible by the:
Definition
globalization of production
Term
The merging of historically distinct and separate national markets into one huge global marketplace is referred to as the:
Definition
globalization of markets
Term
Identify the international treaty committed signatories to lowering barriers to the free flow of goods across national borders and is the predecessor to the WTO.
Definition
The General Agreement on Tariffs and Trade
Term
Why was the International Monetary Fund established?
Definition
to maintain order in the international monetary system
Term
Although Gillette is an American company, it has invested substantial business resources in activities outside the United States. This practice is referred to as:
Definition
foreign direct investment
Term
How does the lowering of barriers to international trade help firms?
Definition
it allows them to view the world as their market
Term
Due to containerization:
Definition
the costs of shipping goods over long distances have significantly decreased
Term
Going by the changing economic geography, most of tomorrow's economic opportunities may be found in:
Definition
the developing nations of the world
Term
Since the 1960's, there have been two notable trends in the demographics of the multinational enterprise. These two trends have been:
Definition
the rise of non-US multinationals and the growth of mini-multinationals
Term
What are mini-multinationals?
Definition
medium-sized and small multinationals
Term
Firms from advanced nations move their manufacturing facilities to countries that have less stringent or no pollution controls to avoid the cost of regulation, is an argument for globalization as a contributing factor to an an increase in pollution.
Definition
True
Term
Culture is:
Definition
a system of values and norms
Term
In a society, actions of people directed toward one another are governed by a set of social rules called ______
Definition
norms
Term
The appropriate dress code in a particular situation, good social manners, eating with the correct utensil, neighborly behavior, and the like, are all guided by the ______ in a society.
Definition
folkways
Term
_______ is defined as a system of shared beliefs and rituals that are concerned with the realm of the spiritual
Definition
Religion
Term
The four most dominant religions in terms of number of adherent in the world today are:
Definition
Christianity, Islam, Hinduism, and Buddhism
Term
In the Islamic view of the world, humans are part of a collective in which:
Definition
the wealthy and successful have obligations to help the disadvantaged.
Term
The general education level of a country is a factor determining all of the following except {national competitive advantage, preeminence of the national culture, attractiveness of the country for international business location, type of products that might sell in that country}
Definition
preeminence of the national culture
Term
In societies where ______ is emphasized, the ties between individuals are tight and everyone is supposed to look after the interests of his or her group
Definition
collectivism
Term
Members of _____ cultures place a premium on job security, career patterns, retirement benefits, and they also had a strong need for rules and regulations.
Definition
high uncertainty avoidance
Term
If a country has a deep rooted culture of men and women sharing work equally and where men and women are paid equally for the same work, it can be said to have a ______ culture
Definition
feminine
Term
Hofstede's fifth dimension of _______ captures attitudes towards time, persistence, ordering by status, protection of face, respect for tradition, and reciprocation of gifts and favors
Definition
confucian dynamism
Term
A belief in the superiority of one's own ethnic group or culture, often resulting in disregard or contempt for the culture of other countries, is termed:
Definition
ethnocentrism
Term
_____ are the oldest and simplest instrument of trade restrictions.
Definition
tariffs
Term
while ____ tariffs are levied as a fixed charge for each unit of a good imported, ____ tariffs are levied as a proportion of the value of the imported good.
Definition
specific, ad valorem
Term
Tariffs cause damage to _______ because this group must pay more for certain imports
Definition
consumers
Term
Tariffs:
Definition
reduce the overall efficiency of the world economy
Term
what is it called when there is a government payment to a domestic producer?
Definition
subsidy
Term
______ tends to be one of the largest beneficiaries of subsidies in most countries
Definition
agriculture
Term
Agricultural subsidies tend to afford inefficient farmers the ability to exit the industry without debt.
Definition
false
Term
A quota on trade imposed by the exporting country, typically at the request of the importing country's government is referred to as a ________
Definition
voluntary export restraint
Term
If Apple won an order to sell 500 of its new minicomputers to Australia, but the Australian government stipulated that 20 percent of the component parts of the minicomputers that it purchased must be produced in Australia, that stipulation would be an example of a ___________
Definition
local content requirement
Term
Consider the following scenario: The Netherlands exports tulip bulbs to almost every country in the world except Japan. The reason is that Japanese customs inspectors insist on checking every tulip bulb by cutting it down the middle which destroys the bulb. The insistence on the part of the Japanese to inspect the bulbs in this manner is an example of an _____________
Definition
administrative trade policy
Term
In the context of international trade, _______ is defined as selling goods in a foreign market at a price below their costs of production or as selling goods in a foreign market at below their "fair" market price
Definition
dumping
Term
The most common political argument for government intervention into the free flow of trade is;
Definition
it is necessary for protecting jobs and industries from unfair foreign competition.
Term
At times, countries contend that it is necessary to protect industries related to aerospace, advanced electronics, and semiconductors because these industries are important for:
Definition
national security
Term
In which of the following countries did the 1986 GATT members embark on their eighth round of negotiations to reduce tariffs? {Germany, Australia, Brazil, Uruguay}
Definition
Uruguay
Term
All of the following are components of the Uruguay Round Agreement EXCEPT:
Definition
tariffs on industrial goods will be increased by more than one-half.
Term
Which of the following that was aimed at avoiding rising unemployment by protecting domestic industry and diverting consumer demand away from foreign products, erected an enormous wall of tariff barriers?
Definition
the Smoot-Hawley Act
Term
Which of the following accurately depicts the levels of economic integration, from least integrated to most integrated?
Definition
Free trade area, customs union, common market, economic union, and political union
Term
Which term is used to refer to a group of countries committed to removing all barriers to the free flow of goods and services between each other, but pursuing independent external trade policies?
Definition
free trade area
Term
A ______ has no barriers to trade between member countries, includes a common external trade policy, and allows factors of production to move freely between members.
Definition
common market
Term
which regional arrangement requires a common currency, harmonization of members' tax rates, and a common monetary and fiscal policy?
Definition
economic union
Term
Concerns about ______ arise because close economic integration demands that countries give up some degree of their control over such key policy issues as monetary policy fiscal policy, and trade policy.
Definition
national sovereignty
Term
Suppose Country A and Country B imposed tariffs on imports from all countries, and then they set up a free trade area, scrapping all trade barriers between themselves but maintaing tariffs on imports from the rest of the world. Country A began to import sugar from Country B. Country A had previously been importing sugar from Country C which produced sugar more cheaply than Country A or B. Which of the following has occurred?
Definition
trade diversion
Term
There are now two trade blocs in Europe. These are the:
Definition
European Union, and European Free Trade Association
Term
What body, established in 1951, was the forerunner of the EU?
Definition
European Coal and Steel Community
Term
Which of the following is NOT one of the four main institutions in the political structure of the European Union?
Definition
The European Standards Board
Term
What is considered the ultimate controlling authority within the EU?
Definition
European Council
Term
What treaty, signed in December 2007, increased the power of the European Parliament?
Definition
The Treaty of Lisbon
Term
Which treaty committed EC members to adopting a common currency by January 1, 1999
Definition
The Maastricht Treaty
Term
Countries adopting the euro have to give up control over monetary policy.
Definition
True
Term
The principle argument of those who opposed NAFTA centered on the fear that ratification would result in:
Definition
mass exodus of jobs from the United States into Mexico
Term
Bolivia, Chile, Ecuador, Colombia, and Peru signed an agreement in 1969 to create the:
Definition
Andean Pact
Term
What is/was an attempt to establish a free trade area between Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam?
Definition
ASEAN
Term
The second most widely traded currency in the world is the
Definition
Euro
Term
When the foreign exchange market determines the relative value of a currency, the country is said to adhere to a _______ exchange rate regime.
Definition
Floating
Term
Some countries try to hold the value of their currency within some range against an important reference currency. This is referred to as a:
Definition
dirty float
Term
The values of a set of currencies are fixed against each other at some mutually agreed on exchange rate in a:
Definition
fixed exchange system
Term
What was the major international institution created by the Bretton Woods conference?
Definition
World Bank
Term
Which of the following is an accurate description of the gold standard?
Definition
Pegging currencies to gold and guaranteeing convertibility.
Term
What is a great strength claimed for the gold standard?
Definition
it contained a mechanism for achieving balance-of-trade equilibrium by all countries.
Term
Which of the following was the objective of establishing the International Monetary Fund (IMF)?
Definition
maintain order in the international monetary system
Term
According to the Bretton Woods agreement of 1944, which currency remained convertible to gold?
Definition
U.S. dollar
Term
What is the official name for the World Bank?
Definition
International Bank for Reconstruction and Development (IBRD)
Term
Between 1965 and 1968, President LBJ backed an increase in US government spending that was financed by:
Definition
an increase in the money supply
Term
In August 1971, US President Nixon made the following two announcements: 1) a new 10% tax on imports would remain in effect until the trading partners of the US agreed to revalue their currency against the dollar and 2) the:
Definition
dollar was no longer convertible to gold
Term
Which of the following was the main element of the Jamaica Agreement of 1976?
Definition
Floating rates were declared acceptable
Term
The case for floating exchange rates has two main elements. These are:
Definition
monetary policy autonomy and automatic trade balance adjustments
Term
Which of the following exchange rate regimes is least practiced by IMF member nations?
Definition
currency board
Term
Under a pegged exchange rate regime, a country will peg the value of its currency to:
Definition
that of a major currency
Term
What percent of IMF member nations practices the free float system?
Definition
14%
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