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25 Cards in this Set
- Front
- Back
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What was the Breton Woods Agreement?
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Signed in New Hampshire, July 1944.
Post WWII effort to rebuild economies. 29 Representative Countries. Led to creation of the Marshall Plan |
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What four things came out of the Breton Woods Agreement and Marshall Plan?
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International Monetary Fund (IMF)
World Bank Gold Standard General Agreement for Tariffs and Trades (GATT) - Eventually became the World Trade Organization (WTO) |
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What was the purpose of the Marshall Plan?
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To rebuild the infrastructure of central Europe following WWII.
Germany's rebuilding was more self developed but used the Marshall Plan funds as a starting point. |
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When and why was the gold standard canceled?
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Canceled by Richard Nixon in 1971 because of the great financial strain of continuing to fight the Vietnam War.
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Describe the International Monetary Fund (IMF).
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- Located in Washington DC
- 188 Country Members (must be member to use services) - Purpose to keep currency stable, reduce poverty, and keep unemployment low. - Promotes global monetary cooperation - Facilitates International Trade - Funded by a % of each members GDP |
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Describe the World Bank.
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- Located in Washington DC.
- 188 Country Members. - Helps underdeveloped countries to become developed. - Attempts to reduce world poverty, environmental issues, HIV and AIDS. - Promotoes gender equity and education. |
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Describe the World Trade Organization (WTO).
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- Located in Geneva, Switzerland.
- 159 members - Funding based on level of trade of members - Promotes International Trade - Grew out of GATT - Makes trade policies - Attempts to prevent "Dumping" of goods - Table for negotiating settlements between countries - Tariffs, quotas, and embargos to punish countries |
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Give one major example of Dumping discussed in class.
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Japan selling cars in US for less than cost to make in order to gain majority market share in a country.
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What are the five main types of Trade Agreements?
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1. Trade Unions
2. Customs Unions 3. Common Markets 4. Economic/Monetary Unions 5. Political Unions |
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What are Trade Unions?
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Purpose to increase exports between countries.
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What is a Customs Union?
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Is a Trade Union +
- members have to treat other trade partners the same EX: Country A has a customs union with B and C. A has a problem with Russia and decides not to trade with Russia. Countries B and C cannot trade with Russia. - Advantage is Customs Unions are powerful - Disadvantage is that they cause some countries to lose soverign rights to trade with others. |
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What is a Common Market?
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Is Trade Union + Customs Union +
- Free movement of labor, capital, and production equipment. |
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What is an Economic/Monetary Union?
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- Combines Trade Union + Cusoms Union +Common Market +
- All mebers use the same currency. - EU is one of the only ones in the World with the Euro. |
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What is a Political Union?
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- Are all four other types of Trade Agreements combined with the addition of using the same political system.
-This currently does not exist anywhere in the world today. |
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What are the five ways Government helps international business and trade?
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1. Low Interest Loans
2. Low Tariffs 3. Subsidies 4. Foreign Trade Zones 5. Gold Key Program |
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What are the two types of International Strategies?
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1. Multinational strategy
2. Global Strategy |
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What is a Multinational Strategy?
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- Strategy for subsidiary companies in each country doing business in.
- Get to know the culture of the people you are doing business with and can respond quickly to changes - Disadvantage is you can't reduce prices to gain competitive edge, R&D costs per country, an cant achieve economies of scale |
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What is a Global Strategy?
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-Business run from home country.
- R&D costs are typically lower - You are not able to react quickly to change in other countries. |
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What is an Export Management Company?
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- Middle-man business that is fairly easy to set up but takes a lot of work to maintain.
- Go between for companies in different countries for finding and exporting equipment or products. - Hazard is that companies could decide to go direct to source as opposed to buying through exp mgmt co. - Exp Mgmt Co's typically handle all of the transportation and customs issues for exporting the products. |
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What are the three main types of legal systems for doing business?
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1. Common Law
2. Civil Law 3. Theocratic Law (religious law) |
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Describe what Common Law is.
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- Came from England in medievil times
- Based on precedence - Very ambiguous - Lengthy process |
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What is Civil Law?
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- Based on Roman Law/Roman Codes
- Less ambiguous - Less lengthy process - Better for business negotiations |
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What are the three main types of Theocratic Law?
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1. Islamic Law
2. Hebrew Law 3. Tribal Law |
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What is an expatriate?
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- A citizen of one country typically working in another country.
- Many fail - Often they are laid off or fired upon their return because their old job has been filled or no longer exists. - Management typically has infrequent communication with their expatriates if things are going well. |
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Why do a majority of expatriates fail and what have many companies started to do to help prevent failure?
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- Lack of skills required to manage in a different culture
- Spouse does not like the posting - Many companies have expatriates go through intensive cultural training before heading overseas. |
