intro business mod 4

What are the two general categories of political systems?

-Democratic -Totalitarian

Companies use a variety of methods to enter global markets. Which two methods are considered moderately risky?

-Global outsourcing - Foreign licensing and franchises

What are three of the most common reasons that countries conduct international trade?

-Need for specific technology -Need for specific products -Lack of sufficient resources

What are other terms for "common market"? More than one answer may be correct.

-An economic community -A trading bloc

How have the World Trade Organization, the World Bank, and the International Monetary Fund helped facilitate trade? More than one answer may be correct.

-By smoothing the flow of money among nations -By providing low-interest loans to developing nations -By monitoring and enforcing trade agreements

Select all of the areas of the law that primarily affect businesses.

-Corporate taxes -Patents and copyrights -Labor relations

For a company, what are possible outcomes of political risk? More than one answer may be correct.

-Disruption of company operations -Seizure of company assets by the government

Select all of the true statements about the EU, USMCA, APEC, and Mercosur common markets.

-Each common market can negotiate trade agreements with other common markets or nations. -Each common market helps reduce trade barriers for member nations.

What are qualities of democratic political systems? More than one answer may be correct.

-Elections in which you can vote for whomever candidate you would like -Assemblies (similar in spirit to the U.S. Senate or House of Representatives) that represent the people

What are ways for countries to protect their domestic industries from international competition?

-Forbidding the import of certain products -Taxing imports -Limiting the amount of a certain product that can be imported

Which methods do businesses use to enter global markets? More than one answer may be correct.

-Importing products for resale -Initiating a strategic alliance with a foreign company -Having parts manufactured in another country

Which countries are defined as developing? More than one answer applies.

-India -Nigeria -Brazil

Which statements about the World Bank are true? More than one answer may be correct.

-It assesses the damage caused by large-scale natural disasters. -It provides low-interest loans to developing nations.

Which statements about the International Monetary Fund (IMF) are true? More than one answer may be correct.

-It provides short-term loans for countries that are in difficult situations. -It helps money flow among nations. -It is affiliated with the United Nations (UN).

What benefits have businesses derived from the World Trade Organization, the World Bank, and the International Monetary Fund? More than one answer may be correct.

-Last-resort loans for certain countries -A formal legal structure for deciding international trade disputes -Improved transportation and telecommunications in developing nations

From the following list, select all of the negative effects that global trade has on workers.

-Reduction of jobs in wealthier nations due to outsourcing. -Lowering of labor standards -Lower wages due to immigration

What factors related to a country's infrastructure are most significant to its ability to conduct business internationally? More than one answer may be correct.

-Telecommunications -Railroads -Power utilities

Select all of the organizations that are specifically designed to promote international trade.

-The International Monetary Fund (IMF) -The World Bank -The World Trade Organization (WTO)

Which features are found in developed nations? More than one answer is correct.

-The headquarters of international organizations -Generally high income among citizens -High levels of foreign investment

Which statements about the World Trade Organization (WTO) are true? More than one answer may be correct.

-The trade rules it enforces are based on the General Agreement on Tariffs and Trade. -It has the legal authority to resolve trade disputes among countries.

Select all of the ways in which trade agreements and common markets affect international business.

-They allow smaller member nations to compete with larger companies in larger countries. -They make it easier for member nations to do business with each other.

Which statements are true about developing countries? More than one answer may be correct.

-They have low average incomes. -They have low economic development.

Which statements about trade agreements and common markets are true? More than one answer may be correct.

-They typically include countries that are located in the same geographical region. -They facilitate international trade among member nations. -They help member nations trade effectively with other trading blocs.

Connect the type of political risk with examples of it.

1. Expropriation- A government takes the funds of a domestic company. A government seizes the factory of an international company doing business in the country. 2. Political instability- Riots break out in capital cities in opposition to a government policy. A government shuts down for months because politicians cannot pass a budget.

What qualities are typical of a totalitarian political system? More than one answer may be correct.

-The presence of a dictator -Just one political party -The absence of elections

What is a tariff?

A tax levied against importers to protect domestic industry

Which method of accessing global markets is considered the lowest risk?

exporting

Unlike instability, which is a type of political risk that results in upheaval and instability of policies, __________ is a type of political risk that involves government seizure of a company's assets.

expropriation

What term is used to describe the value of a country's exports compared to its imports?

Balance of trade

The United States is an example of a(n) ________ political system. (Enter one word in the blank.)

Democratic

What term is used to describe a country with an advanced infrastructure and economy?

Developed

Which country is imposing a revenue tariff?

Egypt, which taxes imports to raise money for the government

Which countries below would be classified as developed? More than one is correct.

France Canada

Global trade can lead to increased jobs and economic vitality. What is one negative effect often pointed out by those who oppose globalization?

Greater disparity between rich and poor

select all examples of trade protectionism.

Import quotas Tariffs Embargoes

What is the main difference between instability and expropriation?

Instability is not specifically targeted at businesses, whereas expropriation is.

What level of risk do businesses assume when they begin exporting to foreign markets?

Low

To beckon someone toward you in China, you place your palm down and move your fingers back and forth. In the United States, you beckon someone with your palm up. The different gestures that mean the same thing are a good example of ______.

Nonverbal communication

Which type of cross-cultural difference may require a business to alter its schedule during the Muslim observance of Ramadan?

Religious

Which countries have totalitarian political systems? More than one answer may be correct.

Saudi Arabia North Korea

Which organization is the lender of last resort?

The International Monetary Fund (IMF)

Which organization provides low-interest loans to developing nations to improve infrastructure, education, and health?

The World Bank

Which organization monitors and enforces trade agreements?

The World Trade Organization (WTO)

Which is the best definition of balance of trade?

The difference in value between a country's imports and exports

What is the definition of globalization?

The increasing connectivity and interdependence of the world's economies, societies, and cultures

What is the definition of culture?

The shared set of beliefs, values, knowledge, and patterns of behavior common to a group of people

What is the most basic reason that countries choose to trade with other countries?

They cannot produce everything they need or want.

What is the primary purpose of a common market?

To make international trade easier

Which common market consists of just three countries — Canada, Mexico, and the United States?

USCMA

a(n) _____ market is a group of nations within a particular geographical region, which have agreed to remove trade barriers with one another. (Enter one word in the blank.)

common

The shared set of beliefs, values, knowledge, and patterns of behavior common to a group of people is called

culture

High levels of income and foreign investment are characteristic of ______ countries.

developed

Countries in Asia, Africa, and Latin America that have low levels of economic development and low average incomes are called ______ nations.

developing

The increasing connectivity and interdependence of the world's economies, societies, and cultures because of advances in communication, technology, trade, international investment, currency movement, and migration is known as

globalization

Which method of entering foreign markets is considered the least risky?

importing and exporting

Before you establish a business in a foreign country, you should investigate the network of physical facilities and resources, which are collectively known as the country's ______.

infrastructure

The legal system of a country is usually the reflection of its ______.

political system

____ tariffs are designed to raise money for the government.

revenue

political _____ is the chance that political changes in a country will cause a company doing business in that country to lose assets or have its foreign operations negatively affected.

risk

A(n) _______ is a trade barrier in the form of a tax levied on imports.

tariff

Drag each example to the corresponding method companies use to access global markets.

1. Importing and exporting -A Mexican manufacturer sends automobile parts to an American auto factory. 2. Franchising and foreign licensing- An American fast-food restaurant gives permission to an Irish business to open and own a new location in Dublin. 3. Global outsourcing- A jewelry designer has her products made in a factory in El Salvador. 4. Joint ventures- An American investor partners with an Italian hotelier to open a new hotel in Sicily. 5. Foreign subsidiaries- Starbucks Coffee opens Starbucks Japan, which it owns and operates.

Match the organization with the way in which it promotes trade.

1. The International Monetary Fund (IMF)- Smooths the flow of money among nations 2. The World Bank- Lends money to developing countries to help them build or improve their infrastructure, making them more likely to participate in international trade 3. The World Trade Organization (WTO)- Monitors trade and enforces trade agreements

Place in order of risk the ways companies might enter foreign markets, with the highest risk method at the top and the lowest risk method at the bottom.

1. foreign subsidiaries 2. joint ventures 3. global outsourcing 4. franchising and foreign licensing 5. importing and exporting

Place the events that led to the creation of the global economy in order, starting with the first at the top.

1. nations began deregulating their economies. 2. the volume of free trade increased 3. Technology advancements helped create a global economy 4. large multinational corporations rose to prominence in the economy

Which of the following is characteristic of developing nations such as China and India?

A rapidly growing economy