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33 Cards in this Set
- Front
- Back
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Globalization
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the shift toward and more integrated and interdependent global economy
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Two components of globalization
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globalization of markets (offering a product worldwide) and globalization of products (different parts of a product from different places)
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GATT
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General Agreement on Tariffs and Trade (GATT), predecessor of WTO, polices world trade, works to lower tariffs
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UN
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preserves peace, 191 nations, solves international problems
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IMF
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International Monetary Fund, maintains order in monetary systems
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WorldBank
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promotes economic development through low-interest loans
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Drivers of globalization
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easier freer flow of goods and technologies
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Political Economy
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politcal, economic, legal systems are interdependent, cant separate them
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Collectivism vs individualism
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working for the common good vs individual rights and freedoms
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Democracy vs totalititarianism
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government by the people with elected representatives vs one person/party has total control over all aspects of life
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Market vs command economy
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supply and demand determines how much is produced and price vs. planned by the government
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Three kinds of legal systems
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Common law, civil law, theocratic law
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Common Law
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developed in England, precedents, traditions, and customs
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Civil Law
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based on a detailed set of codes, judges have little flexibility
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Theocratic Law
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based on religious law, like Islam
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Culture
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complex whole of knowledge, beliefs, customs, morals of a society
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Two dimensions of social structure
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how group-oriented a culture is and whether its divided into classes
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Dominant religions
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Christianity, Hinduism, Islam, Buddhism
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Hofstedes culture dimension
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power distance, uncertainty avoidance masculinity, and individualism
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Ethics
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accepted principles of right and wrong
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most common ethical issues
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employment practices, human rights, environmental regulations, corruption, moral obligations of multinational corporations
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moral courage
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enables people to say no and walk away, blow the whistle on unethical behavior
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Two types of tariffs
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Specific charges- fixed charge per unit, ad valorum= proportion of value to goods
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subsidies
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encourage over-production,inefficiency, reduced trade, revenues are raised by taxes
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Quotas
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caps on how much a product can be imported
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VERs
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quota imposed by the exporting country (usually at the request of the importing country)
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Local content requirements
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a specific fraction of a good must be produced domestically, works like an import quota
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antidumping
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cant sell goods in a foreign market at unfair value or below market price
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political arguments for intervention
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protecting jobs and industries, national security, retaliation
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FDI
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foreign direct investment, one country building a factory in another
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Two forms of FDI
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Greenfield operation (mostly in a developing country), mergers and acquisitions (quicker to execute)
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Horizontal FDI
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same industry abroad as at home
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Vertical FDI
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backward= investing in an industry abroad that helps production back home
forward- less common, industry abroad sells domestic outputs |
