Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
45 Cards in this Set
- Front
- Back
What is Driving globalization |
Declining trade barriers: average tariff is 4%, more favorable for FDI Technological change: phones, planes, all can save money, low transportation costs, low cost for communication and networking Low trade barriers and investment mean firms can: View the world as a singlemarket, firms may also find they’re under attack by foreign firms |
|
GDP |
Measures level of economic development (Gross domestic product) |
|
PPP |
Purchasing power parity-How much could your 10$ get you in other places |
|
G7/E7 |
· G7-largest advanced economies E7-Largest emerging market economies |
|
Measures level of economic development |
· Institutions-The state, rule of law, accountability, market economy |
|
The state |
has legitimate use of force or violence, power to defend itself internally and externally, ability to enforce laws. Modern state must effectively collect taxes. (government) |
|
Rule of law |
· Law applies to everyone equally (even state), Property rights |
|
Accountability |
Free, regular elections. Universal suffrage, free press, political competition, separate powers of state. (Basically our rights, no country can be too powerful). |
|
Market economy |
free market |
|
are engines to long term economic growth. They need a free market |
Innovation and entrepreneurship are engines to long term economic growth. They need a free market (what do they do and what do they need) |
|
Higher economic freedom= |
higher economic growth |
|
Why is international trade good |
· countries produce what they’re best at and trade for what they need therefore helping aworld economy |
|
Mercantalist philosophy |
Export more than they import so you can “win,” there’s always a country that loses intrade |
|
Adam Smith-Absolute advantage |
if a company has an absolute advantage in a product they should make that productand export it |
|
Ricardo’s theory of comparative advantage |
Countries should specialize in the production of the goods they produce most efficiently and buy goods in which they’re less effective at producing (Even if this means buying from countries that they could produce more efficiently at home). |
|
Why is comparative advantage beneficial |
because total output is higher and both countries mutually win in trade |
|
Paul Samuleson |
free trade may ultimately result in lower wages in the rich country due to outsourcing; domestic companies must lower wages to compete with foreign countries |
|
Ohlin and Heckscher |
factor endowments, countries export what they’re endowed with (oil, skilled labor)and import what is scarce |
|
How does government intervene in markets? |
Use of tariffs Subsidies- Importquotas- Voluntary export restraints (VERs)- Local content requirements Anti dumping policies |
|
Tariffs |
(taxes on imports that raise cost of imported goods compared to domestic products) they increase government revenue, force consumers to pay more for certain imports, therefore they’re pro producer and anti consumer. |
|
Subsidies |
· Government payments to domestic products (helps domestic producers compete against low cost foreign imports) could be cash grants, low-interest loans, or tax breaks. |
|
Import quotas |
· restrict content of some goods that may be imported into a country |
|
Voluntary export restraints (VERs)- |
Quotas on trade imposed by exporting country, typically at request of the importing country’s government (Benefit domestic producers, and raise price of imported goods) |
|
Local content requirements |
demand that some specific fraction of a good be produced domestically |
|
Anti-dumping policies |
· punish foreign forms for dumping (selling below market value) to protect domestic producers from unfair foreign competition |
|
What Are The Political ArgumentsFor Government Intervention? |
Protecting jobs Protecting industries that are deemed important for national security Protecting from dangerous products Furthering goals of foreign policy protecting human rights protecting the environment |
|
Furthering goals of foreign policy |
preferential trade terms can be granted to countries that a government wants to build strong relations with |
|
Economic reasons for government intervention |
The infant industry argument Strategic trade policy |
|
The infant industry argument |
an industry should be protected until it can develop and beviable and competitive internationally |
|
Strategic trade policy |
first-mover advantages can be important to success |
|
GATT vs WTO |
GATT is a set of guidelines and rules while The World Trade Organization is an actual organization |
|
Elements of Culture |
Values• Norms• Rituals• Symbols• Beliefs |
|
Culture |
the sum of the values, norms, rituals,symbols, beliefs, and thought processes that are learned, shared by a group of people, and transmitted from generation to generation |
|
Values |
are abstract ideas about what a group believes to be good, right, and desirable |
|
What Are Norms? |
folkways - the routine conventions of everyday life• Generally have little moral significance.• Examples would be dress, eating habits, and social graces. An outsider caneasily be forgiven for being ignorant of a folkway. mores - norms that are central to the functioning of a society (standards of behavior) |
|
What Determines Culture |
The values and norms of a culture evolve over time• Determinants include– religion– political and economic philosophies– education– language– social structure |
|
How Are Individuals and Groups Different? |
In Western societies, there is a focus on theindividual individual achievement is common – high level of entrepreneurship |
|
What Is The Role of Education in Culture? |
Formal education is the medium through which individuals learn many of the language,conceptual, and mathematical skills that are indispensable in a modern society |
|
How Does Culture Impact The Workplace? |
Management processes and practices must be adapted to culturally determined work-related values |
|
Power/Distance |
Distance of power between manager and subordinate (high-obvious power distance Low-Managers and subordinates almost seen as equal) |
|
Individualism |
Individualism- taking care of yourself and immediate family, while collectivism is groups look after each other for loyalty High-(Freedom/respect for privacy) collectivism(Low)- (Team building, work for intrinsic rewards) |
|
Masculinity |
Tough vs tender society (high-Achievement, heroism, and assertiveness) (Low-cooperation, modesty and caring for the weak) |
|
Uncertainty avoidance |
How much a culture like to be uncertain (High-Formal business conduct with rules, need structure, differences are avoided) (Low-Informal business, accepting of change and risk) |
|
Long term orentation |
Whether a person looks for short term gratification or long term. (high-High value placed on learning and education, strong work ethic) (Low-Treat other how you wanna be treated, individualism, promotion of equality) |
|
Hofstede's model |
Individualism, Power distance, Masculinity, Long term orientation, Uncertainty avoidance |