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33 Cards in this Set

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