BUSI 303 : Ch 3 – Flashcards
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Nations that primarily functioned under the centrally planned economic system prior to the 1980s, such as China and Russia, have embraced the market economy.
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False. (migrated to the quasi-market economy)
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Any worldwide factor - outside the laws of supply and demand - that could impact the success or failure of any venture moving into the international arena
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Global business risk
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Imposes a waiting period between the determination of a product's quality and the determination of when it can actually be sold in a market
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Administrative delays
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Which type of risk do managers have some control over?
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Operational
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_______ risk occurs when debtors in a country are unable to ensure timely payments to a foreign currency debt service because of either transfer or exchange restrictions or a general lack of foreign currency.
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Transfer
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The WTO was designed to
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Monitor trade around the entire world
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The Organization for Economic Cooperation and Development (OECD), the WTO, the World Bank, and the International Monetary Fund have all indicated that unstable political systems are the greatest single barrier to economic development worldwide.
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False. (corruption)
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What is an economic and trade sanctions against targeted foreign countries, groups, organizations, and individuals; can be motivated by political, economic, or moral reasons?
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Embargoes
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Any company considering moving into a foreign economic market must consider the powerful influence of the military and religious leadership.
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True.
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Political issues that significantly impact global business include?
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Government restriction of trade?
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What are three ways that Governments promote trade:
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Special government agencies, Subsidies, Foreign Trade Zones (NOT Import Financing)
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What are special privileges offered by the government in order to attract businesses to a region or to provide them with the funding to operate successfully?
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Subsidies
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What are designed to raise revenue for governments and provide a competitive advantage for domestic businesses?
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Tariffs
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Cultures such as China, North Korea, and Cuba believe that an economic value system should be founded on cumulative efforts, controlled by greater entities or governments.
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True?
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What are designated areas in Customs Ports of Entry that allow commercial merchandise to receive the same customs treatment it would receive if it were outside the commerce of the US
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Foreign Trade Zones
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A market economy most often refers to an economic system that is under comprehensive control and regulation by a government, in accordance with the plan of economic development.
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False.
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A loan in which the exporter is covered, but the value of the cover will be less than the value of the contract
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Supplier's credit
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Typically raise the price of imports, reduce the volume of imports, and encourage demand for domestically made substitutes.
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Quotas
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Three purposes of embargoes:
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Protecting the assets of allies from hostile actions, Assuring that the assets of targets will be available to meet future claims, punishing a country or group for unacceptable behavior (NOT increasing resources or technology)
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The three types of global business risk include ownership, operational risk, and transfer risk
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True
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Three types of risks that companies are exposed to in International transactions:
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Violence and Conflict, Terrorism and Kidnapping, Confiscation and Expropriation
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In 1975, as business and policy makers' alike saw the potential growth of global business, the WTO, was created by several countries in order to monitor trade around the entire world.
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False. (1995)
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What places power in the hands of customs officials?
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Quotas
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The U.S. Dept. of Commerce developed the International Trade Administratino (ITA) in order to stimulate economic opportunities for U.S. business and their employees.
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True.
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The U.S. Dept. of the Treasury oversees and enforces all U.S. economic sanctions through the Office of Foreign Assets Control (OFAC).
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True.
