QUIZ 2 – Flashcards
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Theocracy
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a political system in which a country's religious leaders serve as its political leaders
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Advantage of conducting business in totalitarian nations
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international companies are less likely to face local political opposition to their activities
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capitalism
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philosophy that asserts that ownership of the means of production belongs in the hand of individuals and private businesses
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confiscation
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forced transfer of assets from a company to the government wihtout compensation
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common law
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the justice system decides cases by interpreting the law on the basis of tradition, precedent, and usage
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Patent
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a right granted to the inventor of a product or process that excludes others from making, using, or selling the invention
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trademarks
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words or symbols that distinguish a product and its manufacturer from competitors
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prodcut libability laws
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protect people from defective products
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strategic csr
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layer of coporate social responsibility in which a business builds social responsibility into its core operations to create value and build competitive advantage
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carbon footprint
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environmental impact of greenhouse gases that result from human activity
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piracy
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prada bags that are cheap and fake but bear the prada trademark logo
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indivdualist culters tend to offer fewer incentives and rewards than collectivist cultures
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false
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important factor in forming successful business ventures in china
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establishing a trusting relationship before proceeding with business
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mixed economy
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land factories and other economic resources equally split between private and government ownership
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privatization
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the selling of gov. owned economic resources to private operators
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laissez faire economics
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less government interference in commerce and greater individual economic freedom
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monetary policies
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control the currency supply and interest rates in a market economy
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low tarrifs
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characterize a nation with high degree of economic freedom
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GDP
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value of all goods and services produced by a domestic economy over a one year period
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Purchasing Power Parity
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relative ability of two countries currencies to buy the same basket of goods in those two countries
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barter
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the exchange of goods and services for other goods and services instead of money
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shift of a country to a market based economy entails these four things
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deregulation, privitazation, legal systems, and infastructure
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arbitrage
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instantaneous purchase and sale of a currency in different markets for profits
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speculation
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sequential purchase and sale of a currency for profit
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exchange rate systems determined by the governments of countries
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gold standard floating system pegged system
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Law of one price
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indentical product must have an identical price in all countries when expressed in the same currency
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Purchasing power pairty
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relative ability for two countries to buy the same basket of goods
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Following factors help determine foreign exchange rates in a country
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changes in growth in personal income differences in inflation rates changes in interest rates balance of trade fiscal condition of a country
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spot rates
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exchange rate for large sums of money that require delivery within two business days
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currency hedging
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practice of insuring agianst potential losses that reslut from adverse changes in exchange rates often using forward rates and contracts
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how does a stronger domestic currency impact the domestic countries exports and imports
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usd becomes stronger prices go up us exports decrease and the imports increase
