International Business Test 1

Material Covering Test 1 For Hoon Park

Flashcard Set Preview

Side ASide B
Two Basic Economic problems
1) How to produce wealth 2) How to distribute wealth
Why is there continual turmoil in the political environment after the fall of the Soviet Union
Because there is no bipolar system of power. The communist system controlled many countries...
Communist way of tackling the two basic economic problems:
1) Joint production (here is were communism fails, because no one wants to work at maximum...
Consequences of the fall of the Soviet Union
Instead of one big enemy, we were left with many small enemies. We lost the balance of power,...
Neo conservatives
a political group that created the concept of pre-emptive defense.
Are we living in a transitory period today?
Yes, because there is no political system for world peace without another super power.
What is Socio-cultural-economic environment? (aka Globilization)
Think of his example of Princess Dianas death, and the many products and nations involved.
Where does the world become interdependent?
1)National Level 2)Personal level
Growing social/cultural/economic interdependence of countries abetted by the recent technology.
Sociological aspect of globalization provides:
A sense of global unity (aka deterritorialization)
Cultural aspect of globalization provides:
"the west on the rest" and cultrual convergencec. Meaning that the cultures of the west are...
Political aspect of globalization provides:
process of losing the sovereighty of the nation state. Note here that this is also an important...
Economic aspect of globalization provides:
acceleration of cross border transactions, more international trading. Since globalization...
List the importance of each of the three factors of Globalization
1) Technological development has yielded the "death of distance", as well as time and space...
What is the Janus face of globalization and list its factors.
The Janus face is the postive and the negative aspects of each factor for globalization. 1)Economic...
What are some of the impacts, if any, of globalization on MNCs?
1) Globalization is the process of losing soverighnty of the nation state to the MNCs (note:...
New Rule of the game under Globalization
If you arnt globally competitive, you cant survive even in your own domestic market.
Definition of International Business
Sudy of any business activity conducted across national boundries either by provate or government...
Rule of Transfer
"Law of One Price" dictates the transfer of goods, from the low priced market to high priced...
What are the two ways of implementing the rule of Transfer:
1) Arbittrage: where you buy/sell from/to different places. This tactic must be carried out...
Objective of the Economist
Maximise efficiency of the use of scarce resources.
Objective of business
How to maximize return to shareholders.
How does International Economics differ from International Business?
I.B. pays more attention to behavioral aspects, whereas I.E. does not.
What is the Balance of Payment?
a summary of International Business activities of one country, which uses a double entry system...
What does "External Liquidity" mean?
It is a countrys ability to meet foreign claims and to buy foreign goods and services, in the...
What are the major accounts included in the Current Account in the Balance of Payment, and...
I. Current account includes the: a) Merchandise account b) Services account (which then include...
What are the Major accounts included in the Capital Account in the Balance of Payment?
The Capital Account when added together is the Basic Balance. This reflects the ability of...
What are the major accounts included in the Official Reserve Account in the Balance of Payment?
The Official Reserve Account shows what changes are occuring on the Balance of Payment. It...
What is the effect of a deficit/surplus on the Balance of Payment?
If there is a deficit, the value of the countrys economy will decrease, and if there is a surplus,...
What are the three economic variables that can affect the BOP?
1)Inflation: This will always influence the BOP condition. High inflation is a negative impact...
What are the external and internal reasons for the 600 Billion dollar U.S. merchandise deficit?
External Reasons: 1)Lack of reciprocity: we open our markets to almost everyone, but...

Upgrade and get a lot more done!