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49 Cards in this Set
- Front
- Back
Business risk |
is the risk of loss or gain due to economic variables, such as product demand and market competition.
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Product licensing
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grants a firm the right to manufacture another’s product or to use its distribution facilities or technology or to use its name.
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Franchising
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grants a firm the right to supply another’s product or to use its name.
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Foreign direct investment
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occurs when a firm buys assets located in another country.
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Subsidiary
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is a stockissuing company owned or controlled by another company.
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Resource seeker
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looks for resources such as oil and lowcost labor.
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Market seeker
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looks for markets that cannot be served by exporting.
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Market follower
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follows its clients overseas.
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Democratic rule
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is rule by the people though elected representatives.
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Nonparty democracy
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is governed by elected officials who have no political party affiliation.
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Parliamentary democracy
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is governed by a prime minister and an elected parliament.
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Presidential democracy
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is governed by a president who is elected directly by its citizens.
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Multiparty democracy
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is governed by representatives who are elected from many political parties.
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Junta
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is a military government governed by a group of military officers who seize power and maintain control through martial law.
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Martial law
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is military control.
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Monarchy
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is government with a hereditary head of state.
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Absolute monarchy
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is a monarchy in which the leader rules alone with help from the advisers he selects.
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Constitutional monarchy
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is a monarchy in which a parliament governs the country and the monarch has ceremonial powers.
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Single
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party governmentonly allows one specified political party.
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Theocratic government
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is based on religious doctrine and is led by religious leaders.
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Transitional government
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is a temporary form of government used when a country is rebuilding its government, typically after a war.
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Roman
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French lawuses a written legal code with a magistrate who acts as the final arbiter of private law disputes; the court relies heavily on appointed experts who investigate the evidence.
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German law
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uses a legal code designed for interpretation by technical legal bureaucrats.
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Nordic law
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uses a longestablished body of customary law.
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Common law
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uses factintensive inductive reasoning based on precedent.
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Socialist
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communist lawdoes not recognize tort or contract laws because the state owns most means of production.
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Far Eastern law
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relies on local customary law and Confucianism, with an emphasis on compromise rather than on individual rights.
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Islamic law
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uses the Koran as the foundation for its legal system; society must adapt to the law, rather than create laws that reflect society.
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Hindu law
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relies on the philosophical precepts of Hinduism.
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International law
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is the body of law governing relationships among nations.
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Public international law
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addresses the interrelation of nation states; is governed by treaties and other international agreements.
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Private international law
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addresses disputes between individuals or entities in different countries.
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Comity
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is the voluntary, binding recognition of the laws and judicial decisions of another jurisdiction.
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Pegged currency
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is based on an exchange rate fixed to another country’s currency.
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Expropriation
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occurs when a government takes property without its owner’s consent and, usually, without compensation.
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Territorial tax system
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taxes all firms only on the economic activity that occurs within the country’s geographic borders, regardless of the location of the firm’s incorporation or operations.
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Worldwide tax system
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taxes domestically incorporated firms on their total earnings from both domestic and international activities.
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Border tax adjustment (BTA)
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creates a ‘taxneutral’ setting for international trade by providing tax rebates on exported goods and imposing taxes on imported goods.
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BTA
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abbreviates border tax adjustment.
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Earnings stripping
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lets a firm reduce its overall tax liability by moving earnings from a high tax jurisdiction to a lowtax jurisdiction, usually by letting debt accumulate within the hightax jurisdiction.
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Inversion (expatriation or reincorporation)
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occurs when a firm established in a lowtax country buys the shares and/or assets of a domestic corporation, which lets the domestic company become a foreignbased company.
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Expatriation
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is another term for inversion. Reincorporationis another term for inversion.
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Transfer price
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is the price one branch of a company charges for goods and services it provides to another branch of the same company.
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Tax haven
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is a country that offers financial incentives to encourage foreign firms to do business.
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Bearer share
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is not registered; its ownership remains private.
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Registered share
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keeps records of the share’s owner and its buying and selling price.
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Repatriation of earnings
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is the process by which a US firm moves earnings from its foreign affiliates back to its US parent.
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Dumping
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occurs when a firm sells a large quantity of goods at less than fair value, including selling goods abroad for less than the market price at home.
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Common Market |
is a single, unified market in which goods, services, people, and capital move freely across borders. |