Term
| In a world without barriers, what are trade patterns determined by? |
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Definition
| the relative productivity of different factors of production in different countries |
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Term
| What should countries specialize in with free trade? |
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Definition
| products they can make most efficiently |
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Term
| what will countries import in a free trade situation? |
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Definition
| products they produce less efficiently |
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Term
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Definition
| a situation in which a government does not attempt to restrict what its citizens can buy from or sell to another country |
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Term
| What are two gains from free trade? |
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Definition
| Static economic gains and dynamic economic gains |
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Term
| what are the main instruments used in a trade policy? |
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Definition
1. tariffs
2. subsidies
3. import quotas
4. voluntary export restraints
5. administrative policies
6. antidumping duties
7. local content requirements |
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Term
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Definition
| A tax levied on imports or exports |
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Term
| What are the two categories of tariffs? |
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Definition
| specific or ad valorem tariffs |
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Term
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Definition
| levied as a fixed charge for each unit of a good imported |
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Term
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Definition
| levied as a proportion of the value of the imported good |
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Term
| why are tariffs placed on goods? |
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Definition
| to protect domestic producers from foreign competition by raising the price of imported goods; they also produce revenue for the governement |
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Term
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Definition
| the government and domestic producers |
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Term
| why does the government gain from tariffs? |
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Definition
| they increase government revenues |
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Term
| why do domestic producers gain from tariffs? |
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Definition
| it affords them some protection from foreign competitors by increasing the cost of imported foreign goods |
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Term
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Definition
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Term
| why do consumers lose from tariffs? |
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Definition
| they must pay more for certain imported goods |
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Term
| True or False: Tariffs are pro- prodcuer and anti- consumer |
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Definition
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Term
| How do tariffs reduce the efficiency of the world economy? |
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Definition
| a protective tariff encourages domestic firms to produce products at home that could be produced more efficiently abroad |
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Term
| Name two objectives of export tariffs |
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Definition
| to raise revenue for the government and to reduce exports from a sector |
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Term
|
Definition
| a government payment to a domestic producer |
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Term
| Cash grants, low interest loans, tax breaks, and government equity participation are types of ... |
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Definition
|
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Term
|
Definition
| aims to keep peace through international cooperation; effortst to improve the wellbeing of people everywhere in order to create conditions for lasting peace |
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Term
| How do subsidies help domestic producers |
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Definition
| lower production costs allow them to compete against foreign imports and help gain export markets |
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Term
| what sector is the largest beneficiary of subsidies? |
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Definition
|
|
Term
| who gains the most from subsidies? |
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Definition
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Term
| what does strategic trade policy favor? |
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Definition
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Term
| why does strategic trade policy favor subsidies? |
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Definition
| to help domestic firms achieve a dominant position in those industries in which economies of scale are important and the world market is not large enough to profitably support more than a few firms |
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Term
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Definition
| direct restriction on the quantity of some goods that may be imported into a country |
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Term
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Definition
| hybrid between quota and tariff; lower tariff rate is applied to imports within the quota than those not in the quote |
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Term
| voluntary export restraint--ver |
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Definition
| quota on trade imposed by the exporting country, typicaly at the request of the importing country's government |
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Term
| who benefits from quotas? |
|
Definition
| the domestic producers because it limits import competition |
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Term
| why do quotas or VERs harm the consumer? |
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Definition
| they always raise domestic prices of imported goods |
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Term
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Definition
| the extra profit that producers make when supply is artifically limited by an import quota |
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Term
| local content requirements |
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Definition
| some specific fraction of a good be produced domestically |
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Term
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Definition
| specifies that government agencies must give preference to american products when putting contracts for equipment out to bid |
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Term
| How is a product qualified 'american' |
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Definition
| if 51% of the materials by value are produced domestically |
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Term
| administrative trade policies |
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Definition
| bureaucratic rules designed to make it difficult for imports to enter a country |
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Term
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Definition
| selling goods in a foreign market at below their costs of production or selling goods in a foreign market below their fair market value |
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Term
| what is another name for antidumping policies |
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Definition
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Term
| Political argument for government intervention |
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Definition
| protects interest of certain groups or achieves a political objective |
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Term
| economic argument for government intervention |
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Definition
| boost the overall wealth of a nation |
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Term
| common agricultural policy |
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Definition
| designed to protect the jobs of europe's politically powerful farmers by restricting imports and guaranteeing prices |
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Term
1. protecting jobs and industries
2. national security
3. retaliation
4. protecting consumers
5. furthering foreign policy objectives
6. protecting human rights
7. protecting the environment |
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Definition
| political arguments for intervention |
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Term
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Definition
| allows americans to sue foreign firms that use property in Cuba confiscated from them after the 1959 revolution |
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Term
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Definition
| first international agreement to limit global warming |
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Term
| the infant industry and strategic trade policy argument are... |
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Definition
| two types of economic arguments for intervention |
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Term
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Definition
| governments should temporarily support new industries until they have grown strong enough to meet international competition |
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Term
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Definition
| industries in which the existence of substantial economies of scale implies that the world market will profitably support only a few firms |
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Term
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Definition
| aimed at avoiding rising unemployment by protecting domestic industries and diverting consumer demand away from foreign products |
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Term
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Definition
| the shift toward a more integrated and interdependent world economy |
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Term
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Definition
| the merging of individual and distinct national markets into one big market for the world |
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Term
| globalization of production |
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Definition
| the sourcing of goods and services from around the world to take advantage of the national differences in cost and quality of production factors |
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Term
| World Trade Organization -- WTO |
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Definition
| responsible for policing the world trading system and making sure nations adhere to the rules agreed to and signed by members of the WTO |
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Term
| How does the WTO help facilitate globalization? |
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Definition
| promotion of lowering barriers to cross border trade and investment and creating an open global business system without barriers to trade |
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Term
| The International Monetary Fund-- IMF |
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Definition
| maintains order of the international monetary system and provides loans to nations in trouble |
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Term
|
Definition
| provides money to poor nations seeking infrastructure investments to promote economic development |
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Term
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Definition
| suggests that only social responsibility of a business is to increase profits, so long as the company stays within the rule of law |
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Term
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Definition
| argues that ethics are culturally determined and that firms should adopt the ethics of the culture in which they operate |
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Term
| what are the drivers of globalization? |
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Definition
| the decline in trade barriers to free flow of goods and technological changes in communication, information processing and transportation technology |
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Term
| The legal system of a country refers to... |
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Definition
| the rules or laws that regulate behavior along with the process by which the laws are enforced |
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Term
|
Definition
| tradition, precedent and custom |
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Term
| In common law, judges have the power to... |
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Definition
| interpret law so that it applies to the unique circumstances of an individual case |
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Term
| The Righteous moralist approach |
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Definition
| claims that a multinational's home country standards of ethics should be followed in foreign countries |
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Term
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Definition
| detailed set of laws organized into codes |
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Term
| theocratic law is based on... |
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Definition
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Term
| The most widely practiced theocratic legal system is... |
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Definition
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Term
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Definition
| system of values and norms that are shared among a group of people and that when taken together constitute a design of living |
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Term
|
Definition
| abstract ideas about what a group believes to be good, right, and desirable |
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Term
|
Definition
| the social rules and guidelines that prescribe appropriate behavor in particular situations |
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Term
|
Definition
| characteristics such as family background, occupation, and income |
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Term
|
Definition
| the extent to which individuals can move out of the strata into which they are born |
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Term
|
Definition
| closed system of stratification in which social position is determined by the family into which a person is born; change in position not usually possible |
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Term
|
Definition
| social mobility is possible through his or her achievements or luck |
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Term
|
Definition
| a condition where people tend to perceive themselves in terms of the class background and this shapes their relationship with members of other classes |
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Term
| religion is defined as... |
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Definition
| system of shared beliefs and rituals that are concerned with the realm of the sacred |
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Term
|
Definition
| refer to a set of moral principles or values that used to guide and shape behavior |
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Term
| This religion has a relationship with emergence of modern capitalism, entrepreneuship, individualism and economic freedom |
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Definition
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|
Term
| foreign businesses are welcome as long as they follow these rules |
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Definition
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|
Term
| this religion encourages ascetic lifestyle and supports caste system |
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Definition
|
|
Term
| this religion places no emphasis on creation of wealth and does not encourage caste system |
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Definition
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|
Term
| this religion places great emphasis on loyalty, reciprocal obligations and honesty |
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Definition
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|
Term
| this dimenson is focused on how a society deals with the fact that people are unequal in physical and intellectual capabilities |
|
Definition
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|
Term
| This dimension is focused on the relationship between the individuals and his or her fellows |
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Definition
| individualism vs collectivism |
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Term
| This dimension measures the extent to which different cultures socialized their members into acception ambiguou situations and tolerating uncertainty |
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Definition
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|
Term
| This act outlawed the paying of bribes to foreign government officials to gain business |
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Definition
| FCPA--foreign corrupt practices act |
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Term
| The mercantilist doctrine advocates |
|
Definition
| government intervention to achieve a surplus in the balance of trade |
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Term
|
Definition
| asserts that if a manager of a multinational sees that firms from other nations are not following ethical norms in a host nation, the manager should not follow either |
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Term
|
Definition
| approach focuses on the philopshy that people should be treated as ends and never purely as the means to the end of other |
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Term
|
Definition
| a country could earn gold and silver by exporting goods, conversely importing goods from other countries would result in an outflow of gold and silver to those countries |
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Term
|
Definition
| a country has this advantage in the production of a product when it is more efficient than any other country in producing it |
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Term
|
Definition
| country specializes in the production of those goods that it produces most efficiently and to buy the good that it produces less efficiently from other countries |
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Term
|
Definition
| unit cost reductions associated with a large scale of output; major source of cost reductions in many industries |
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Term
|
Definition
| a nation's position in factors of productiviy such as skilled labor or the infrastructure necessary to compete in a given industry |
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Term
|
Definition
| the nature of home demand for the industry's product or service |
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