International Business Test 1 (Chapters 1-6) with complete solutions
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Course
International Business
Institution
International Business
Globalization of Markets
Merging of separate markets into one huge global marketplace
Globalization of production
Sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production.
Foreign direct...
International Business Test 1 (Chapters 1-
6) with complete solutions
Globalization of Markets - ANSWER-Merging of separate markets into one huge global
marketplace
Globalization of production - ANSWER-Sourcing of goods and services from locations
around the globe to take advantage of national differences in the cost and quality of
factors of production.
Foreign direct investment (FDI) - ANSWER-occurs when a firm invests resources in
business activities outside its home country.
-Greater than 10% investment.
4 stylized facts that describe the demographic changes of the global economy -
ANSWER-1. The changing world output and world trade picture.
2. The changing foreign direct investment picture.
3. The changing nature of the multinational enterprise
4. The changing world order.
Individualism - ANSWER-Individuals should have freedom in his/her economic and
political pursuits
Collectivism - ANSWER-Political system that stresses the primary of collective goals
over individuals goals
Totalitarianism - ANSWER-Form gov't where one person or political party exercises
absolute control over all spheres of human life and prohibits opposing political parties.
Democracy - ANSWER-Political system where gov't is run by the people
Communists - ANSWER-Believe that socialism could be achieved through violent
revolution and totalitarian dictatorship.
, Social Democrats - ANSWER-Turned their backs on violent revolution and dictatorship
Communist Totalitarianism - ANSWER-Deny many basic civil rights to people
Theocratic Totalitarianism - ANSWER-Political power is monopolized by a party, group
or individual that governs according to religious principles
Tribal Totalitarianism - ANSWER-When a political party that represents the interests of
a particular tribe monopolizes power.
Right-wing totalitarianism - ANSWER-Permits some individual economic freedom, but
restricts individual political freedom
Market Economies - ANSWER--All productive activities are privately owned and
production is determined by supply and demand.
- No gov't interaction
Command Economies - ANSWER-Gov't plans the goods and services that a country
produces, its quantity that is produced, and the prices that they are sold at.
Mixed Economies - ANSWER-Certain parts of the economy are left to private ownership
and free market.
-A mix of private ownership and gov't intervention.
Common Law - ANSWER-Based in tradition, precedent, and custom.
Civil Law - ANSWER-Based on detailed set of laws.
Theocratic Laws - ANSWER-Laws are based on religious teachings.
Private Action - ANSWER-Theft, Piracy, Blackmail
-Criminals
-Illegal
Public Action - ANSWER--Legal
-Bribes that are legal
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