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use of subsidies

- protect domestic producers by maintaining profit - gain export market

Which the the following is not a characteristic of globalization?

A. National economies are turning into independent economic systems.

Cultural relativism suggests that:

A. ethics are nothing more than a reflection of culture and that a firm should adopt the ethics of the culture in which it is operating.

command economy

An economic system in which the government controls a country's economy. (supply is fixed, no cost control)

Antitrust laws, also referred to as "competition laws"

Antitrust laws, also referred to as "competition laws," are statutes developed by the U.S. Government to protect consumers from predatory business practices by ensuring that fair competition exists in an open-market economy. These laws have evolved along with the market, vigilantly guarding against would-be monopolies and disruptions to the productive ebb and flow of competition.

Critics of globalization maintained that the apparent decline in real wage rates of unskilled workers

B. is due to the migration of low wage manufacturing jobs offshore and a corresponding reduction in demand for unskilled workers.

What is the total cumulative value of foreign investments best referred to as?

C. Stock of foreign direct investments

Ethical dilemmas exists because of all of the following reasons except:

C. doing the right thing, or knowing what the writing might be, is often far too easy.

Identify the correct statement concerning globalization.

C. is transforming industries and is highly welcomed by those who believed their jobs were protected from foreign competition.

The reduction in the average tariff rates on manufactured products since 1950 implies all the following except that

C. nations are becoming increasingly independent of each other for imported goods and services

According to ____, socialism can only be achieved through violent revolution.

Communists

Mercantilism

Country's should export more than they import. Views trade as zero sum game. ONE WINS, ONE LOSES. (inflation in England, Deflation in France)

At the Doha Round of the WTO in late 2001, A. the WTO was established. B. GATT was extended to include services. C. world trade volume increased. D. an agenda was established to phase out subsidies to agricultural producers

D

The _____ occurs when a resource is shared by all, but owned by no one, is overused by individuals, resulting in its degradation. A. Friedman effect B. noblesse oblige C. inequity aversion D. tragedy of the commons

D

According to ____, the social responsibility of business is to increase profits, so long as the company stays within the rules of law.

D. the Friedman doctrine

As transportation costs or trade barriers increase, exporting becomes unprofitable, compared to FDI and licensing. T/F

F

Licensing is usually a good option for firms in high-tech industries where protecting firm-specific expertise is of paramount importance. T/F

F

The Foreign Corrupt Practices Act originally allowed "facilitating payments" to secure contracts that would not otherwise be secured. T/F

F

The product life-cycle theory and Knickerbocker's theory of horizontal FDI tend to be very useful from a business perspective because the theories are more descriptive than analytical. T/F

F

Which of the following is NOT a consequence of the reduction in trade barriers and restrictions on FDI since 1950? The economies of the world's nation states are becoming more intertwined. Firms are dispersing parts of their production process to global locations to drive down production costs and increase product quality. Nations are becoming more independent of each other for important goods and services. The world has become significantly wealthier since 1950.

Nations are becoming more independent of each other for imported goods and services.

Subsidy

Payment made by the government to producers of a good or service, which Intended to lower their costs.

PPF

Production Possibility Frontier/Curve

MNE- imperialist domination, exploits host countries for benefit of home countries

Radical View

Strong shift towards free market stance

Shifting Ideology

Individualism has led to a high degree of managerial mobility between companies resulting in managers who have good general skills but lack company-specific experience. True False

T

The WTO supports the promotion of international trade in services. T/F

T

The two most common methods of restricting inward FDI are ownership restraints and performance requirements. T/F

T

Which of the following observations about the Foreign Corrupt Practices Act is true? A. The act outlawed the paying of bribes to foreign government officials to gain business. B. There is enough evidence that it put U.S. firms at a competitive disadvantage. C. The act originally allowed for "facilitating payments." D. The Nike case was the impetus for the 1977 passage of this act.

The act outlawed the paying of bribes to foreign government officials to gain business.

World Trade Organization (WTO)

The organization that succeeded the General Agreement on Tariffs and Trade (GATT) as a result of the successful completion of the Uruguay Round of GATT negotiation

Stocks of Foreign Direct Investment

The total accumulated value of foreign-owned assets at a given time

Constant Returns to Specialization (Chuyên ngành lợi nhuận không đổi)

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.

Foreign Corrupt Practices Act

U.S. law regulating behavior regarding the conduct of international business in the taking of bribes and other unethical actions.

The ____ is primarily responsible for policing the world trading system and making sure nation-states adhere to the rules laid down in trade treaty signed by member states

WTO

Subsidies (protectionism)

government payments to domestic producers -Subsidies help domestic producers -compete against low-cost foreign imports -gain export markets -Consumers typically absorb the costs of subsidies

A multinational enterprise (MNE) is a firm that _____. does most of its business on the Internet has production units in more than two countries lists its securities on a public exchange exports its products to multiple countries

has production units in more than two countries

Specific Tariffs

levied as a fixed charge for each unit of a good imported

Ad Valorem Tariffs

levied as a proportion of the value of the imported good

internalization theory/market imperfections theory

limit of licensing 1. giving away technological know 2. firm has no control over manufacturing, marketing, and strategy 3. success depends on management, manufacturing, and marketing

Private goods:

manage resources through interaction of supply and demand

An economy in which the interaction of supply and demand determines the quantity in which goods and services are produced is called a _____. market economy command economy closed economy planned economy

market economy

Import Quotas

restrict the quantity of some good that may be imported into a country

Tariffs (protectionism)

taxes levied on imports that effectively raise the cost of imported. - pro-producer and anti-consumer - reduce the overall efficiency of the world economy - increase government revenues -are pro-producer and anti-consumer - force consumers to pay more for certain imports

When contemplating FDI, why do firms apparently prefer to acquire existing assets rather than undertake greenfield investments?

Mergers and acquisitions are quicker to execute than greenfield investments

Production should be distributed based on comparative advantage

Free Market View

In the following situations, would FDI improve the current account of the host country's balance of payments?

If the FDI is a substitute for imports of goods or services

_____ occurs when a firm exports goods or services to consumers in another country. Outsourcing Inward investment International trade Foreign direct investment

International Trade

International Monetary Fund (IMF)

International institution set up to maintain order in the international monetary system

General Agreement of Tariffs and Trade (GATT)

International treaty that committed to lowering barrier to the fee flow of goods across national borders and led to the WTO (World Trade Organization)

Which of the following is in a country's best interests according to the main tenet of mercantilism?

Maintaining a trade surplus (export more than import)

____ is consistent with the notion that an individuals right to do something maybe restricted because it runs counter to "The good of society" or "the common good."

collectivism

economic system

countries where individual goals over collective goals.

sovereignty

the authority of a state to govern itself or another state. An example of sovereignty is the power of a king to rule his people.