Chapter 4 Material
Inversion
-Companies avoid taxes in their home countries -merge with companies located in other countries and shifting HQ there
Major Multinational Enterprises
-Defined by UN as fins that control assets abroad -Most global commerce carried out by small number of powerful firms
Corporate Political Systems
-Democracy -Free Enterprise System -Central State Control
Entering/Competing in the Global Marketplace
-Develop global market channels -Establish global operations -Develop global supply chains
International Financial and Trade Institutions
-World Bank -International Monetary Fund -World Trade Organization
Free Enterprise System
-based on the principle of voluntary associations and exchange -members of society satisfy most of their economic needs through voluntary market transactions
Central State Control
-economic power is concentrated in hands of government officials, political authorities -central gov. owns property used to produce goods and services
World Trade Organization
-international body that establishes ground rules for trade among nations -major objective is to promote free trade; attempts to eliminate barriers to trade -conducts "rounds" of negotiations on various topics
Democracy
-presence of political freedom -fair elections -separation of powers -independent media -open society
World Bank
-provides economic development loans to member nations -funds used for roads, dams, power plants, other infrastructure projects, education, health, social services -funding provided by member countries, international capital markets
An individual who is a supporter of globalization would argue that it helps the developing world by
-providing people in developing countries with more jobs -allowing new ideas and technological innovations to spread quickly -giving entrepreneurs access to foreign investment funds to support economic development
International Monetary Fund
-purpose is to stabilize the system of currency exchange rates and international payments to enable member companies to participate in global trade -lends foreign exchange to member countries
Foreign District Investment
-worldwide flow of capital -occurs when company, individuals, or fund invests money in another country by buying shares of stock in or loaning money to a foreign firm
True
Although many firms conduct business across national boundaries, most global commerce is carried out by a small number of powerful firms
Most nations in the world share similar political, social, and economic beliefs
False
Which statements are true about global income?
Income is how much one earns in one day or a year; and income at the bottom of the pyramid varies from place to place
The primary purpose of the International Monetary Fund is to
Lend foreign currency to member countries
Globalization directly and indirectly influences the politics, environment, geopolitics, and economics of virtually every country in the world
True
Globalization is accepted worldwide and creates little controversy
True
A society where economic power is concentrated in the hands of government officials and political authorities is called
a central state control system
Develop global market channels
build successful business in home country, export products or services to buyers in other countries
Civil Society
comprises nonprofit, educational, religious, community, family, and interest-group organizations
Index of Economic Freedom
fundamental rights of every human being to control his or her own labor and property
Experts attribute the growth of nongovernmental organizations to
greater openness in many societies
Bottom of the Pyramid
individuals earning below $3000 a year in local purchasing power
Establish global operations
locate manufacturing plants or service operations in other countries as a way to cut costs
Inequality
measured by wealth and income
Develop global supply chains
purchase raw materials, components, or other supplies from sells in other countries; work may be subcontracted
Wealth
refers to assets a person accumulates and he or she owns at a point in time
Income
represents how much a person earns in a day or year
The deep anti-Americanism that exists in some parts of the world is thought to be caused by
resentment of cultural penetration from U.S. based multinational enterprises
Globalization
the increasing movement of goods, services, and capital across national borders
Microfinance
when financial organizations provide loans to low-income clients or solidarity lending groups who traditionally lack access to banking or related services