INTB 3355 FINAL

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Internal Economic Analyses: Management requires economic data and ______ data

socioeconomic

ISO & IEC is an example of...

standardization of measurement, materials and equipment, and other technology fields

Income redistribution proceeds very slowly, so older data are ____ _____.

still useful

global interest in arbitration is growing. What are some reasons arbitration is preferred over litigation?

suspicion of foreign courts, faster, confidential, less expensive

Example of the US enforcing laws abroad not by force but through traditional legal means

the US government imposes taxes on US citizens and US permanent residents regardless of either the source of income or the residence of the taxpayer

Confiscation

the action of taking or seizing someone's property with authority

Define: discretionary income

the amount of income left after paying taxes and making essential purchases

Discretionary income

the amount of income left after paying taxes and making essential purchases

What is the best known organization that administers international arbitrations?

the international court of arbitration of the international chamber of commerce in paris

Extraterritoriality

the lack of clarity about foreign countries overlapping laws

Define: Underground economy

the part of a nations's income that, because of un-reporting or underreporting, is not measured by official statistics

Political Risk

the risk an investment's returns could suffer because of poltical changes or instability in a country.

Define: Gross National Income (GNI)

the total value of all income generated by the residents of a nation, including both the domestic production of goods and services and income from abroad

Privatization

the transfer of public sector assets to the private sector

Name 3 complains privately owned companies have of government-owned companies

they dont have to make a profit; government contracts; export assistance

If a country with a moderate risk of kidnapping presented a great opportunity for investment, what would you do?

train your employees on security measures

Nationalization

transfer of property from private to public ownership on a large scale with/without compensation

What are the two sources of law?

treaties and customary international law

Nationalization and privatization are opposing _____.

trends

(True/False) Chevron needs to compensate indigenous people for contamination clean up, potable water system, public health system, and community restoration in Ecuador.

true

(true/false) Immigration has a positive impact on employers, managers, workers with complementary skills, the federal government; and a negative impact on states with generous social services

true

(true/false) income is generally more evenly distributed in richer nations

true

(true/false) litigation settled in court; arbitration settled in private

true

(true/false) sources of conflict and violence are citizens protesting their government, territorial disputes, disputes based on ethic, or racial or religious divisions.

true

Low-income economies: GNI per capita less than $_____

1,045

Middle-income economies: GNI per capita between $______ and $12,746

1,045

High-income economies: GNI per capita of $_______ or more

12,746

Chevron/Texaco operating in Ecuador for about 30 years for oil exploration; dumped ___ billion gallons of toxic waste and contaminated 1500 square miles of land

16

What year did Germany, France, Italy, Belgium, Netherlands and Luxembourg all join the European Union?

1952

What year did Denmark, Ireland and UK join the European Union?

1973

What year did Greece join the European Union?

1981

What year did Spain and Portugal join the European Union?

1986

What year did East Germany join the European Union?

1990

What year did Austria, Finland and Sweden join the European Union?

1995

What year did Czech Republic, Cyprus, Estonia, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia join the European Union

2004

What year did Bulgaria and Romania join the European Union?

2007

What year did Croatia join the European Union?

2013

Ecuador sues Chevron for the dumping and demands compensation for the wrongs committed against them; ___ individuals representing 30,000 victims' files suit in US against Chevron.

47

After NAFTA, Trade between the three parties currently accounts for about __% of Canadian and Mexican trade and more than a third of US trade

80

After NAFTA, ______ trade in both directions between Mexico and the US increased from $7.3 billion in 1994 to $20.1 billion in 2006

Agricultural

Name 3 countries in the emerging market stage

Brazil, Russia and Mexico

Questionable or dubious payments paid to government officials by companies looking to purchase contracts from those governments

Bribes

The member countries of NAFTA are:

Canada, Mexico, and the US

What came before the NAFTA?

Canada-US Free Trade Agreement

What happened after the Chevron verdict?

Chevron lied to US courts and still hasn't paid and denies responsibility for misconduct

A contract clause to establish where disputes will be settled

Choice of Forum Clause

The European Commission oversees the implementation of the legislation, taking non-compliers to the ____.

Court of Justice

International rules derived from customs and use over centuries

Customary International Law

What makes the Ecuador vs. Chevron case a good illustration of extraterritoriality?

Ecuador is trying to apply their ruling to a US company that no longer does business in their country

Current NAFTA Concerns for Canada:

Energy trade policies

Import restrictions, local participation requirements, local content restrictions, government-owned competition

Entry Barriers

Process of using a market factor that is successful in one market to estimate demand in a similar market

Estimation by Analogy

Council, European Parliament or another party places request for legislation to the _________.

European Commission

Hierarchy of the European Union:

European Council>European Parliament>Council of Ministers>European Commission>Court of Justice>Court of Auditors>Economic and Social Committee>Committee of the Regions>European Investment Bank>Agencies>European Central Bank

The Commission drafts the legislation and presents it to the _____ and _____.

European Parliament and Council of Ministers

Government seizure of the assets of a handful of companies with compensation is known as

Expropriation

A country's attempt to apply its laws to foreigners or nonresidents and to acts and activities that take place outside of its borders

Extraterritoriality

Only in communist countries do governments own the factors of production

False

(true/false) The Economic Screen should be conducted before the basic needs screen.

False. Basic needs is first

Environmental scanning is a sub-type of market screening

False. Market screening is the sub-type

U.S. law banning payments to foreign government officials for special treatment

Foreign Corrupt Practices Act

Most international organizations prefer GNI to GDP for measuring the value produced in an economy because...

GDP only measures the market value of goods and services produced in a nation in a particular year

Which presidential candidate won the popular vote?

Hillary Clinton

_______ has more than tripled since NAFTA's inception

Intra-North American trade

When did NAFTA launch?

January 1, 1994

When was the implementation of NAFTA completed?

January 1, 2008

Laws stimulating the specified amount of a good or service be supplied by producers in the domestic market

Local content requirements

What is "Data that correlate highly with market demand for a product"?

Market Factors

Economic data used to measure relative market strengths of countries or geographic areas

Market Indicators

Alternative explanations to pre-NAFTA

Mexican economic crisis, losing manufacturing jobs to China, World economic crisis

In NAFTA, _____ protected from financial instability in South America

Mexico

The NAFTA Increased export manufacturing in _____.

Mexico

The transfer of private assets to the public sector with or without compensation.

Nationalization

What are the different types of property seizure

Nationalization, Confiscation and Expropriation

What does NAFTA stand for?

North American Free Trade Agreement

Nationalization and privatization are

Opposing Trends

What 3 places are centers of arbitration?

Paris, London and NY

Political climate, government stability, public unrest

Policy Stability

When public assets are sold to a private owner

Privatization

Restrictions on the repatriation of earnings, limits to F.D.I, inability to provide foreign exchange

Profit Remittance Barriers

How should the US react to the loss of manufacturing jobs?

Provide additional incentives for companies to reverse offshoring practices.

NAFTA Stipulations

Removal of most tariffs and restrictions on trade between the US, Canada, and Mexico. Wide range of agreements on agricultural, textile and automotive trade. Agreements on telecommunications and intellectual property. Mobility of workers. Environmental policies.

Example of privatization

Thailand has private companies operating some of the passenger trains of its state-owned railroad

Define: Rule of Law

The basis of a country's legal system, protects investment

Data on imports may not completely measure market potential because

Transportation costs impact prices

Agreements between countries - also called conventions, covenants, compacts, protocols

Treaties

Successive observations of a variable at regular intervals analyzed to establish regular patterns that are used for establishing future values

Trend Analysis

Immigration has a positive impact on employers, managers, workers with complementary skills, the federal government; and a negative impact on states with generous social services

True

What is CISG?

UN convention of international sale of goods

Legal Performance Contracts Possible Solutions

UN convention on international sale of goods. private solutions are arbitration, an alternative to litigation. incoterms, the international chamber of commerce's universal trade terminology

Currently, Mexico's main concerns regarding NAFTA are related to:

US migration policies and high corn subsidies for US farmers

Which of the following was NOT among the 6 founding members of the European Union? Germany Italy Belgium United Kingdom

United Kingdom

Based on the information you have, do you believe Chevron should pay a compensatory fine?

Yes, as ruled by the Ecuadorian courts

Define: developed economies

a classification for high-income industrialized nations, which have high living standards and the most technically developed infrastructure

Define: developing economies

a classification for the world's lower-income nations, which have less technically developed infrastructures and lower living standard

Define: Extraterritoriality

a country's attempt to apply its laws to foreigners or nonresidents and to acts and activities that take place outside its borders

Define: Extraterritorial Application of Laws

a country's attempt to apply its laws to foreigners or nonresidents and to acts and activities that take place outside of its borders

Define: Arbitration

a dispute resolution mechanism that is an alternative to litigation

Define: Purchasing Power Parity (PPP)

a means of adjusting the exchange rates for two currencies so the currencies have equivalent purchasing power

PPP

a means of adjusting the exchange rates for two currencies so the currencies have equivalent purchasing power. Use when you are trying to compare and rank economies so we don't end up comparing apples and oranges.

Define: Gross Domestic Product (GDP)

a measure of an economy's size based on the market value of goods and services produced within a nation in a year

Define: income distribution

a measure of how a nation's income is apportioned among its people

Define: Gini index

a measure of the degree to which family income within a country is distributed equally

Define: Disposable Income

after-tax personal income

Define: Treaties

agreements between countries - also called conventions, covenants, compacts, protocols

The ____ _____ _____ allows non-US nationals to file lawsuits in US courts for alleged violations of international law.

alien tort statute

International Economic Analysis

all firms must conduct economic analysis and should provide economic data on both actual and prospective markets

List the possible solutions of international dispute settlement

un convention on international sale of goods; arbitration-an alternative to litigation; incoterms, the international chamber of commerce's universal trade terminology

Underground economy includes...

undeclared production of legal and illegal goods and services

Higher income tax levels and increased government red tape tend to create a bigger _______ _______.

underground economy

UNCITRAL is an example of...

uniform accounting and bankruptcy standards

UN-CSIG is an example of...

uniformity in international sales agreements

Country with largest GNI based on PPP

united states

What does the Foreign Corrupt Practices Act (FCPA) do?

us law banning payments to foreign government officials for special treatment

Define: Foreign Corrupt Practices Act (FCPA)

us laws banning payments to foreign government officials for special treatment

Facilitating grease payments for routine government actions such as...

visa issuance, import approvals, and the processing of government papers

One of the major problems usually involved in cross-border litigation is the question of...

which jurisdiction's law should apply and where the litigation should occur

International Litigation Major Problems

which jurisdiction's laws should apply? where will litigation occur?

What is an example of international arbitration?

world bank

Should Turkey become a member of the European Union?

yes

Will the European Union survive in the future?

yes

Define: Foreign Impact

all the uncontrollable forces originating outside the home country that surround and influence the firm

Define: Foreign environment

all the uncontrollable forces originating outside the home country that surround and influence the firm

The European Union in the 21st century:

ambitious process of constitutionalization; different from other regional organizations (NAFTA) that only focus on economic matters

Who should make a binding decision in the Ecuador vs. Chevron case?

an international court should be created that could make binding decisions

private solution to performance of contracts

arbitration

The purpose of economic analyses is to...

assess the overall outlook for the economy and the impact of economic changes on the firm

Country with largest GNI based on exchange rates

australia

International law comes from several sources, the most important of which are _____ and ______ treaties between nations

bilateral and multilateral

A contract clause establishing where a dispute will be settled is known as

choice-of-forum clause

International Litigation Solutions

choice-of-law clause where law governs and choice-of-forum clause where disputes will be settled

WW2 provided impetus for change in European relations such as:

collective security and economic political integration

Determinants of political risk in a country/region include the circumstances of:

conflict and violence; terrorism and kidnapping; property seizure; policy changes; local content requirements

Chevron destroys company documents showing _____.

contaminations

NAFTA lead to Increased _________ investment between the three countries

foreign direct

In the 1990s, there was a boost in efforts to establish _______ and ______ in Asia and in North and South America.

free trade areas and customs unions

Legal Performance Contracts Major Problems

getting other side to perform obligations. no worldwide court has power to enforce decrees. UN International Court of Justice relies on voluntary compliance. International contracts are complicated to enforce.

List the major problems of international dispute settlement

getting other side to perform obligations; no worldwide court has power to enforce decrees; international court of justice relies on voluntary compliance; international contracts are complicated to enforce

Foreign Corrupt Practices Act (FCPA) uncertainties

grease not outlawed; no clear distinction between legal grease and illegal bribes;

Ecuadorian court rules _____ for Chevron.

guilty

Income inequality ______ in early stages of development and _____ in later stages.

increases reverses

Income Distribution

indicates how a nation's income is apportioned among its people

Define: International Impact

interaction between domestic and foreign environmental forces or between sets of foreign environmental forces

Define: International environment

interaction between domestic and foreign environmental forces or between sets of foreign environmental forces

_______ ______ flows better with standardized laws

international business

Define: Customary International Law

international rules derived from customs and used over centuries

Why is arbitration preferred?

it's usually quicker, less expensive, and more private than litigation, and it's usually binding on all parties. It's a process, agreed to by parties to a dispute in lieu of going to court, by which a neutral person or body makes a binding decision

Country with smallest GNI based on exchange rates

kenya

country with smallest GNI based on PPP

kenya

The U.S., EU and other countries attempt to enforce their _____ outside their borders

laws

The European Parliament and Council of Ministers vote on the _____.

legislation

International Dispute Settlement

litigation performance of contracts united nations solutions private solutions - arbitration

Current NAFTA Concerns for US:

losing manufacturing jobs to Mexico

The NAFTA led to a reduction in _______ jobs in the US

manufacturing

Low income distribution score =

more equal distribution

What policy should the US pursue relative to NAFTA?

more integration

It is more complex to do international economic analysis because of...

multiple economies and their interactions and divergent values

What is an example of Foreign Corrupt Practices Act (FCPA) uncertainties?

no clear distinction between legal grease and illegal bribes

Where litigation in international disputes should occur is

often complex, so contracts should choose choice-of-law clause and choice-of-forum clause

whenever businesses enter into agreements with other businesses, the possibility exists that there may be problems getting the other side to...

perform its obligations

Chevron has opportunity to litigate in US, but...

pleas to move to Ecuador and promises US court to follow court decision

A type of risk faced by investors or corporations as a result of political changes or instability in a country

political Risk

UN has sponsored many conferences that have led to multinational agreements on a range of matters, including:

postal delivery and use of driver's licenses in other countries

multilateral negotiations and global economic competition provide ...

powerful incentives

What was the main goal of NAFTA?

promote economic growth by easing the movement of goods and services between the US, Mexico and Canada

Income is generally more evenly distributed in ______ nations

richer

The main motivation behind the creation of the European Union was:

security concerns

Economic analyses for multinationals are more complex than those for a purely domestic firm because there are many _______ to consider instead of just one, there are interactions between them, and values are highly divergent.

economies

Define: emerging market economies

economies with per capita incomes in the low to middle range that are in a transition toward developed status

Many countries, including the US and members of the European Union, often attempt to ______ their laws outside of its borders

enforce

Extraterritorial application of laws has been extended in many other areas including antitrust and _______ laws.

environmental

what is grease?

facilitating payments made solely to expedite nondiscretionary official actions

(True/False) Democrats won a majority in the US Senate

false

(True/False) Only in communist countries do governments own the factors of production

false

(true/false) developed countries tend to have low savings rates

false


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