International Business Chapter 3 – Flashcards
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Tariff
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designed to raise revenue for governments and provide a competitive advantage for domestic businesses
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True
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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. (True or False)
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False
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Operation risk occurs when debtors in a country are unable to ensure timely payments of foreign currency debt service because of either transfer or exchange restrictions or a general lack of foreign currency. (True or False)
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Subsidies
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_______ 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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Government restriction of trade
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Political issues that significantly impact global business include
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False
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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
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In 1975, as business and policy makers' alike saw the potential growth of global business, the World Trade Organization (WTO) was created by several countries in order to monitor trade around the entire world.
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False
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The Organization for Economic Cooperation and Development (OECD), the World Trade Organization, 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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True
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Global business risk is 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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Operational
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Which type of risk do managers have some control over?
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True
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The three types of global business risk include ownership risk, operational risk, and transfer risk.
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Foreign Trade Zones
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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 United States
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False
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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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True
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The U.S. Department of Commerce developed the International Trade Administration (ITA) in order to stimulate economic opportunities for U.S. businesses and their employees.
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Quotas
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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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True
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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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Quotas
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places power in the hands of customs officials
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Administrative delays
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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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Supplier's Credit
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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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WTO
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is designed to monitor trade around the entire world
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Embargoes
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is an economic and trade sanctions against targeted foreign countries, groups, organizations, and individuals and can be motivated by political, economic, or moral reasons
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True
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The United States Department of the Treasury oversees and enforces all U.S. economic sanctions through the Office of Foreign Assets Control (OFAC).
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Increasing resources or technology
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NOT a purpose behind embargoes
