INTB Exam 1
stability
A government that has achieved ____ has the ability to maintain itself in power and hold to predictable fiscal and political policies.
Terrorism
A request for ransom is associated with the extreme act of ___.
universalist, particularist
A(n) ___ culture tends to be rule-based, while ___ cultures tend to be relationship-based.
specific
A(n) ___ duty is a fixed sum of money charged for a specified physical unit of the product.
country risk
A(n) ____ assessment reviews a country's economic situation and politics to determine how much risk to employees, property, and investment exists for firms doing business there.
specific
A(n) ____ is a fixed sum of money charged for a specified physical unit of the product.
Common
A(n) _______ market is created when a customs union lifts restrictions on the mobility of services, labor, and capital among member nations.
Communism
ASEAN is an Asian trade group that was formed to protect member countries from the growth of ________ in the region.
train the labor force, obtain the required investment capital, achieve economies of scale, master production techniques
Advocates for the protection of an infant industry claim that firms need protection from imports until they ____.
Economic
Attempts by nations to create agreements that lead to improved trade conditions for parties to the agreement are known collectively as _________ integration.
stability
Businesses like peace and predictability because they provide ___.
-They are a collection of norms that regulate the relations of individuals to each other. -They are organizations that a group, society, or culture constructs to provide meaning to social life. -They are organizations that a group, society, or culture constructs to limit behavior.
Characteristics of institutions:
-It adopts resolutions that express the will of the member-nations. -Its decisions are normative and voice world opinion. -It is the main deliberative body, with each nation having one vote.
Characteristics of the General Assembly of the United Nations:
-Established at the Bretton Woods meeting. -Established to address economic development. -Functions as a nonprofit cooperative for its member-nations.
Characteristics of the World Bank:
Russia, Belarus, Kazakhstan, Armenia, Kyrgyzstan
Countries in the Eurasian Economic Union
paradoxes
Cultural ___ are contradictions in a culture's values.
human resources
Cultural values play key roles in motivating and evaluating employees. This statement is an example of culture affecting which business function?
privatization
During Margaret Thatcher's tenure as prime minister of Britain, she decreased the number of state-owned companies and sold more than 30 companies, thereby raising $65 billion for the country. Thatcher was implementing ____.
Normative
Economic integration agreements are informal ________ institutions that rely on agreements among members, and their development has tended to follow a general pattern from free trade area through common market to economic integration.
political
Economic integration also requires a high-degree of ________ integration.
are detrimental to trade and reduce economic efficiencies
Economists agree that political barriers to trade _______.
direct government subsidies
Economists argue that the best way to protect national security and provide for national defense is through ____.
the context of the communication pattern
Edward Hall's cultural framework is based upon ____.
quantitative
The requirement that foods sold to the US Department of Agriculture for use in school lunches must be produced in the United States is an example of a _____ nontariff barrier.
-Address the downsides of globalization, such as terrorism and arms traffic -Prepare the ground for investment in emerging economies -Set technical standards and norms.
General areas of responsibility of the United Nations
Japan
Governmental intervention in trade reflects a governmental trade strategy in ____.
Free trade area
In a(n) ________, there are no tariffs or quotas when members trade, and each member maintains its own external tariff on goods arriving from countries in the rest of the world.
government
International firms can be protected from terrorism and cybercrime through ____ actions.
16,000
It is estimated that worldwide there are more than ____ ransom and kidnapping situations every year.
Sustainability
The Global Compact was established by the United Nations and is the basis for a(n) _______ initiative.
European Union
The Maastricht Treaty established the _______ in 1993.
decrease
The Smoot-Hawley Tariff Act demonstrates how tariffs can cause world trade to ___.
Trade flows
The World Trade Organization has a direct impact on increasing ___________.
superior management, advanced technologies, more capital per worker
Productivity per worker is greater in more developed countries because of ___.
International Monetary Fund
The ____________ operates on the premise that the common interest of all nations in a workable international monetary system far transcends their conflicting national interests.
material
The human-made objects created by a culture are called ____ culture, or artifacts.
-It operates as a collaboration of nations. -It makes funds available for balance-of-payments corrections. -It promotes international monetary cooperation.
Statements regarding the International Monetary Fund:
duty
Supporters of fair competition suggest that an import ___ will bring the cost of imported goods up to the cost of domestically produced goods.
True
T/F: A national system of law can minimize unfair international competition.
False
T/F: ASEAN, whose initial goal was political, to foster peaceful relations among members, includes China as its core member.
False
T/F: Although the EU can influence the practices of businesses located in non-EU member countries, Microsoft has been able to maintain business in the EU much as it conducts business in the United States.
True
T/F: An important assumption that the IMF makes is that collaboration among nations is necessary to support trade.
True
T/F: Businesses favor stable governments because fiscal, monetary, and political policies are then predictable.
False
T/F: Country risks are hardly ever political in nature.
False
T/F: Examples of informal, normative institutions would include local town/city governments and the US government.
False
T/F: Fair competition is a strong rationale for trade barriers. With fair competition, there will be increased efficiency for everyone.
False
T/F: Firms are nationalized when the goal of the government is to spread a socialist-communist ideology.
False
T/F: Formal institutions operate through laws and regulations. They require members to make a written commitment.
True
T/F: Governments own the factors of production not only in communist countries, but in many market-based countries.
False
T/F: Import duties mean lower prices for the consumer.
True
T/F: In a customs union, common external tariffs are added to an existing FTA, as found in the Southern African Customs Union and Mercosur.
False
T/F: In more parts of the world, you will not find government-owned businesses.
True
T/F: Institutions are constructed to provide meaning and stability to social life, regulate the relations of individuals to each other, and limit behavior of individuals and firms.
True
T/F: Kidnap, ransom, and extortion are techniques often used by terrorists against which insurance is available.
False
T/F: Leadership styles tend to remain constant across cultures.
False
T/F: Loaning seed money for entrepreneurial startups in developed nations is an area in which the UN plays a significant role for international business.
True
T/F: One historic function of government has been to create stable and predictable environments, in order to protect economic activities within its borders.
True
T/F: Sanctions are a type of trade restriction generally ineffective in forcing change in other countries.
False
T/F: Sanctions are effective at achieving their goal of forcing change in the targeted country.
False
T/F: The EU has been unsuccessful at harmonizing customs and tax formalities within their borders.
False
T/F: The EU is administered by the European Commission, a group composed of six commissioners, elected at the EU level.
False
T/F: The UN General Assembly is the main staff organization responsible for the UN administration.
False
T/F: The national defense argument for trade restrictions is based on the country's level of development and foreign direct investment.
True
T/F: The practice of country risk assessment is an exercise in understanding the local environment.
False
T/F: Trading blocs are designed to bring cost savings to international firms, whether inside or outside the trading bloc.
True
T/F: US ocean shipping companies are benefitting from US government subsidies.
False
T/F: When people are kidnapped for ransom, all governments agree that the right response is to pay the ransom, get the hostages released, and then retaliate.
False
T/F:Unpredictable government actions create many business opportunities.
import
Tariffs are also called ____ duties
Member states
The Council of the European Union represents the ________ and is the primary policy-setting institution in the EU.
foreign policy, domestic affairs, economic
The three areas of integration established in the European Union are _______.
World Bank
The two major global monetary institutions are the International Monetary Fund and the _______.
comparative
Those who believe it is important to protect infant industries claim that, in the long run, these industries will have a(n) ____ advantage, but in the meantime these firms need protection from imports.
Piracy
US cargo ships have been hijacked by groups from West Africa who demand money for the release of the ship. This form of hijacking is called ____.
local
Under an orderly marketing arrangement, there is an agreement that each nation will preserve some of the national market for ____ producers.
exporting
Voluntary export restraints are export quotas imposed by the ____ nation.
-Universal Postal Union protocols prevent losses and allow the mail to move across borders. -The World Health Organization sets criteria for pharmaceutical quality and standardizes drug names. -When ships sail freely across the seas, they are protected by rules legitimized in UN conferences.
Ways in which the United Nations directly impacts the conduct of business:
ASEAN
What Asian trade group began as a military and security agreement?
individualism-collectivism, power distance, masculinity-femininity, uncertainty avoidance
What are Hofstede's original four cultural dimensions?
Predictable fiscal policies, Predictable monetary policies, Maintains itself in power
What are characteristics of a stable government?
They are forms of discrimination against imports; They impose additional costs on customers; They can be quantitative and nonquantitative; They impose additional costs on producers
What are characteristics of nontariff barriers?
To reduce the size of government; To raise money; To ensure that a business runs more efficiently
What are reasons for the government to privatize a business?
protect domestic infant industries; promote national defense; preserve domestic jobs
What are some of the reasons a government would restrict trade?
piracy, kidnapping, cybercrime, terrorism
What are the areas of increasing to governments as they try to protect business activities?
It reduces export revenues for the country's manufactures; It impedes the funding of continues innovation; It impedes efforts to sustain international market share
What are the potential drawbacks to placing a ban on the export of advances technologies?
standards, direct government participation in trade, customs and other administrative procedures
What are the three major groupings of nonquantitative nontariff barriers?
Exact revenge for real or imagined wrongs; Overthrow a government; Gain release of imprisoned colleagues
What are three typical objectives of terrorism?
inability to ensure peace and a pattern of unpredictable change
What can unstable governments present to businesses?
World Bank
What institution functions as a nonprofit cooperative for its member-nations and is able to pass onto developing nations its ability to borrow funds at low rates?
World Trade Organization
What institution is a rule-based, member-driven organization with decisions negotiated by all the member governments and is the only global international organization designed to establish and help implement rules of trade between nations?
OECD (Organisation for Economic Co-operation and Development)
What institution provides information on economic and other activities within its member-nations and serves as a forum for discussion of shared economic and social policy issues?
Export-Import Bank
What is an example of a government-owned business in the United States?
General Assembly
What is the main deliberative body of the United Nations, in which each nation has one vote regardless of size, wealth, or power?
Institutions such as the WTO, National laws, Negotiations between governments
What methods can a government use to minimize unfair international competitions?
ethnocentricity
What term is given to the belief that your own culture is superior to other cultures?
nationalize
When governments _____ private firms, they move them from private ownership to public ownership.
increase
When governments impose trade restrictions, the cost of the traded goods will ____.
False
When the US military contracts out security details in war zones, it is engaged in nationalization.
ad valorem
Which duty is stated as a percentage of the invoice value of the product?
To follow an economic or political ideology; To increase profitability; To extract more money from the firms; To control an earlier investment in a firm
Which of the following are reasons why governments nationalize private firms?
-It supports the fight against poverty. -It helps maintain financial stability. -It supports efforts to increase economic growth.
Which of the following are ways the OECD supports governments?
European Parliament
Which of the nine institutions within the EU represents the people of Europe and is elected from member-states?
Journal of the United Nations
Which publication reports the daily business of the General Assembly?
Mexico, United States, Canada
Which three countries comprise the North American Free Trade Agreement?
Formal
Which type of institution operates through laws and regulations to influence behavior?
United Nations
Which worldwide organization has 193 member-nations and is dedicated to the promotion of peace and global stability?
education systems, tax rates, labor systems
With full economic integration, as in the European Union, a central bureaucracy is responsible for coordinating what?
greater
With the advent of WTO agreements, nontariff barriers have gained ____.
labor, capital, services
Within a free trade area, restrictions generally remain on the movement of what?
Institutions
____ are organizations that a group or society construct to provide stability and meaning to social life.
Institutions
______ are important to business decision makers because they provide ways to settle conflicts between countries and resolve disagreements more easily than if one government worked directly with another.