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12 Cards in this Set

  • Front
  • Back
FOREIGN EXCHANGE RISK
THE RISK OF FACING UNCERTAIN FUTURE EXCHANGE RATES
POLITICAL RISK
POTENTIAL LOSSES TO THE PARENT FIRM RESULTING FROM ADVERSE POLITICAL DEVELOPMENTS IN THE HOST COUNTRY.
SHAREHOLDER WEALTH MAXIMIZATION
THIS REPRESENTS THE MOST IMPORTANT OBJECTIVE OF CORPORATE MANAGEMENT THAT MANAGERS OF COMPANIES SHOULD KEEP IN MIND WHEN THEY MAKE IMPORTANT CORPORATE DECISIONS. MANAGERS CAN MAXIMIZE SHAREHOLDER WEALTH BY MAXIMIZING THE MARKET VALUE OF THE FIRM.
CORPORATE GOVERNANCE
THE ECONOMIC, LEGAL, AND INSTITUTIONAL FRAMEWORK IN WHICH CORPORATE CONTROL AND CASH FLOW RIGHTS ARE DISTRIBUTED AMONG SHAREHOLDERS, MANAGERS, AND OTHER STAKEHOLDERS OF THE COMPANY
EUROPEAN CENTRAL BANK (ECB)
THE CENTRAL BANK OF THE 11 COUNTRIES THAT MAKE UP THE EMU, RESPONSIBLE FOR MAINTAINING PRICE STABILITY VIA MONETARY POLICY.
COMPARATIVE ADVANTAGE
THE NOTION THAT IF COUNTRIES SPECIALIZE PRODUCTION IN THOSE INDUSTRIES WHERE THEY CAN PRODUCE GOODS AND SERVICES MORE EFFICIENTLY (RELATIVELY SPEAKING) THAN OTHER COUNTRIES, AND ENGAGE IN TRADE, ALL COUNTRIES WILL BE BETTER OFF.
GATT
GENERAL AGREEMENT OF TARIFFS AND TRADE
A MULTILATERAL AGREEMENT BETWEEN MEMBER COUNTRIES TO PROMOTE INTERNATIONAL TRADE. THE GATT PLAYED A KEY ROLE IN REDUCING INTERNATIONAL TRADE BARRIERS.
WTO
WORLD TRADE ORGANIZATION
PERMANENT INTERNATIONAL ORGANIZATION CREATED BY THE URUGUAY ROUND TO REPLACE GATT. THE WTO WILL HAVE POWER TO ENFORCE INTERNATIONAL TRADE LAWS.
EU
EUROPEAN UNION
A REGIONAL ECONOMIC INTEGRATION IN WESTERN EUROPE, CURRENTLY WITH 15 MEMBER STATES, IN WHICH ALL BARRIERS TO THE FREE FLOW OF GOODS, CAPITAL, AND PEOPLE HAVE BEEN REMOVED.
NAFTA
NORTH AMERICAN FREE TRADE AGREEMENT
CREATED IN 1994, IT INCLUDES THE US, CANADA, AND MEXICO AS MEMBERS IN A FREE TRADE AREA. NAFTA AIMS TO ELIMINATE TARIFFS AND IMPORT QUOTAS OVER A 15-YEAR PERIOD.
PRIVATIZATION
ACT OF A COUNTRY DIVESTING ITSELF OF OWNERSHIP AND OPERATION OF BUSINESS VENTURES BY TURNING THEM OVER TO THE FREE MARKET SYSTEM.
MNC
MULTINATIONAL CORPORATION
REFERS TO A FIRM THAT HAS BUSINESS ACTIVITIES AND INTERESTS IN MULTIPLE COUNTRIES.