BUSMHR 2000 Exam 1
Group of Twenty (G20) - ✔️✔️-Established in 1999.
-Comprises the finance ministers and central bank governors of the 19 largest
economies in the world, plus representatives from the European Union and the
European Central Bank.
-Originally established to formulate a coordinated policy response to financial crises in
developing nations.
-2008/2009 it became the forum where major nations attempted to launch a coordinated
policy response to the global financial crisis.
The Uruguay Round - ✔️✔️-December 1993
-Extended GATT to cover services as well as manufactured goods.
-Provided enhanced protection for patents, trademarks, and copyrights.
-Established the World Trade Organization to police the international trading system.
General Agreement on Tariffs and Trade (GATT) - ✔️✔️Institution created by voluntary
agreement between individual nation-states and their functions are enshrined in
international treaties.
Globalization of markets - ✔️✔️The merging of historically distinct and separate
national markets into one huge global marketplace.
Globalization of production - ✔️✔️The 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.
Factors of production - ✔️✔️Labor, energy, land, and capital.
World Trade Organization (WTO) - ✔️✔️-GATT successor
-Primarily responsible for policing the world trading system and making sure nation-
states adhere to the rules laid down in trade treaties signed by WTO member states.
International Monetary Fund (IMF) - ✔️✔️-Created in 1944 by 44 nations that met at
Bretton Woods, New Hampshire.
-Established to maintain order in the international monetary system.
World Bank - ✔️✔️-Created in 1944 by 44 nations that met at Bretton Woods, New
Hampshire.
-Set up to promote economic development.
,-Less controversial than IMF
United Nations - ✔️✔️-Established October 24, 1945
-Committed to preserving peace through international cooperation and collective
security.
UN Charter - ✔️✔️An international treaty that establishes basic principles of
international relations.
UN Four Purposes - ✔️✔️1. To maintain international peace and security.
2. To develop friendly relations among nations.
3. To cooperate in solving international problems and in promoting respect for human
rights.
4. To be a center for harmonizing the actions of nations.
Two main Globalization - ✔️✔️The shift toward a more integrated and interdependent
world economy.
factors that underlie the trend toward greater globalization - ✔️✔️1. Decline in barriers
to the free flow of goods, services, and capital that has occurred since WWII
2. Technological change, particularly the dramatic developments in recent decades in
communication, information processing, and transportation technologies.
International trade - ✔️✔️Occurs when a firm exports goods or services to consumers
in another country.
Foreign direct investment (FDI) - ✔️✔️Occurs when a firm invests resources in
business activities outside its home country.
Barriers to international trade - ✔️✔️High tariffs on imports of manufactured goods.
Consequence of high tariffs - ✔️✔️"Beggar thy neighbor" retaliatory trade policies.
Countries would progressively raise their trade barriers against one another.
GATT effect on average tariff rates - ✔️✔️Average tariffs rates haven fallen
significantly since 1950, now standing above 4%.
The Doha agenda - ✔️✔️-Cutting tariffs on industrial goods, services, and agricultural
products.
-Phasing out subsidies to agricultural producers.
-Reducing barriers to cross-border investments.
-Limiting the use of antidumping laws.
, Lowering barriers to international trade - ✔️✔️-Enables firms to view the world as their
market.
-Allows firms to base production at the optimal location for that activity.
Why world trade is growing faster than world GDP - ✔️✔️-Firms are dispersing parts of
their production process to different locations around the globe (decreases production
costs, increases product quality).
-Economies of the world's nation-states are becoming more intertwined as trade
expands.
-The world has become significantly wealthier since 1990 (due to rising trade).
Effect of the growth of the integration of the world economy into a single marketplace -
✔️✔️Increases in competition in a range of manufacturing and service industries.
Microprocessor - ✔️✔️-Single most important innovation that enabled the growth of
high-power, low-cost computing.
-Vastly increased the amount of information that can be processed by individuals and
firms.
-Led to the development of satellite, optical fiber, wireless technologies, and Internet.
Moore's Law - ✔️✔️-Phenomenon that predicts that the power of microprocessor
technology doubles and its cost of production falls in half every 18 months.
The Internet - ✔️✔️-1994: first web browser introduced.
-Developed into the information backbone of the global economy.
-Rolls back constraints of location, scale, and time zones.
Transportation Technology - ✔️✔️In economic terms: most important are the
development of commercial jet aircraft and super-freighters, and introduction of
containerization.
Containerization - ✔️✔️-Simplifies transshipment from one mode of transport to
another. (started 1970s/1980s)
-Significantly lowers the cost of shipping goods over long distances.
-Transportation costs have plummeted.
Implications for the Globalization of Production - ✔️✔️-Transportation costs associated
with globalization of production have declined. -Dispersal of production to
geographically separate locations have become more economical.
-Real costs of information processing and communication also decreased.
Implications for the Globalization of Markets - ✔️✔️-Low cost global communication
networks helped to create electronic global marketplaces.
Group of Twenty (G20) - ✔️✔️-Established in 1999.
-Comprises the finance ministers and central bank governors of the 19 largest
economies in the world, plus representatives from the European Union and the
European Central Bank.
-Originally established to formulate a coordinated policy response to financial crises in
developing nations.
-2008/2009 it became the forum where major nations attempted to launch a coordinated
policy response to the global financial crisis.
The Uruguay Round - ✔️✔️-December 1993
-Extended GATT to cover services as well as manufactured goods.
-Provided enhanced protection for patents, trademarks, and copyrights.
-Established the World Trade Organization to police the international trading system.
General Agreement on Tariffs and Trade (GATT) - ✔️✔️Institution created by voluntary
agreement between individual nation-states and their functions are enshrined in
international treaties.
Globalization of markets - ✔️✔️The merging of historically distinct and separate
national markets into one huge global marketplace.
Globalization of production - ✔️✔️The 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.
Factors of production - ✔️✔️Labor, energy, land, and capital.
World Trade Organization (WTO) - ✔️✔️-GATT successor
-Primarily responsible for policing the world trading system and making sure nation-
states adhere to the rules laid down in trade treaties signed by WTO member states.
International Monetary Fund (IMF) - ✔️✔️-Created in 1944 by 44 nations that met at
Bretton Woods, New Hampshire.
-Established to maintain order in the international monetary system.
World Bank - ✔️✔️-Created in 1944 by 44 nations that met at Bretton Woods, New
Hampshire.
-Set up to promote economic development.
,-Less controversial than IMF
United Nations - ✔️✔️-Established October 24, 1945
-Committed to preserving peace through international cooperation and collective
security.
UN Charter - ✔️✔️An international treaty that establishes basic principles of
international relations.
UN Four Purposes - ✔️✔️1. To maintain international peace and security.
2. To develop friendly relations among nations.
3. To cooperate in solving international problems and in promoting respect for human
rights.
4. To be a center for harmonizing the actions of nations.
Two main Globalization - ✔️✔️The shift toward a more integrated and interdependent
world economy.
factors that underlie the trend toward greater globalization - ✔️✔️1. Decline in barriers
to the free flow of goods, services, and capital that has occurred since WWII
2. Technological change, particularly the dramatic developments in recent decades in
communication, information processing, and transportation technologies.
International trade - ✔️✔️Occurs when a firm exports goods or services to consumers
in another country.
Foreign direct investment (FDI) - ✔️✔️Occurs when a firm invests resources in
business activities outside its home country.
Barriers to international trade - ✔️✔️High tariffs on imports of manufactured goods.
Consequence of high tariffs - ✔️✔️"Beggar thy neighbor" retaliatory trade policies.
Countries would progressively raise their trade barriers against one another.
GATT effect on average tariff rates - ✔️✔️Average tariffs rates haven fallen
significantly since 1950, now standing above 4%.
The Doha agenda - ✔️✔️-Cutting tariffs on industrial goods, services, and agricultural
products.
-Phasing out subsidies to agricultural producers.
-Reducing barriers to cross-border investments.
-Limiting the use of antidumping laws.
, Lowering barriers to international trade - ✔️✔️-Enables firms to view the world as their
market.
-Allows firms to base production at the optimal location for that activity.
Why world trade is growing faster than world GDP - ✔️✔️-Firms are dispersing parts of
their production process to different locations around the globe (decreases production
costs, increases product quality).
-Economies of the world's nation-states are becoming more intertwined as trade
expands.
-The world has become significantly wealthier since 1990 (due to rising trade).
Effect of the growth of the integration of the world economy into a single marketplace -
✔️✔️Increases in competition in a range of manufacturing and service industries.
Microprocessor - ✔️✔️-Single most important innovation that enabled the growth of
high-power, low-cost computing.
-Vastly increased the amount of information that can be processed by individuals and
firms.
-Led to the development of satellite, optical fiber, wireless technologies, and Internet.
Moore's Law - ✔️✔️-Phenomenon that predicts that the power of microprocessor
technology doubles and its cost of production falls in half every 18 months.
The Internet - ✔️✔️-1994: first web browser introduced.
-Developed into the information backbone of the global economy.
-Rolls back constraints of location, scale, and time zones.
Transportation Technology - ✔️✔️In economic terms: most important are the
development of commercial jet aircraft and super-freighters, and introduction of
containerization.
Containerization - ✔️✔️-Simplifies transshipment from one mode of transport to
another. (started 1970s/1980s)
-Significantly lowers the cost of shipping goods over long distances.
-Transportation costs have plummeted.
Implications for the Globalization of Production - ✔️✔️-Transportation costs associated
with globalization of production have declined. -Dispersal of production to
geographically separate locations have become more economical.
-Real costs of information processing and communication also decreased.
Implications for the Globalization of Markets - ✔️✔️-Low cost global communication
networks helped to create electronic global marketplaces.
