C211 Global Economics for Managers
Base of the pyramid (BOP) - ANSWER-Economies where people make less than
$2,000 per capita per year.
BRICA - ANSWER-Brazil, Russia, India, and China.
Emerging economies - ANSWER-term that has gradually replaced the term "developing
countries" since the 1990s.
Emerging markets - ANSWER-A term that is often used interchangeably with "emerging
economies."
Expatriate manager - ANSWER-A manager who works abroad, or "expat" for short.
Foreign direct investment (FDI) - ANSWER-Investment in, controlling, and managing
value-added activities in other countries.
Global Business - ANSWER-Business around the globe.
Globalization - ANSWER-The close integration of countries and peoples of the world.
Gross domestic product (GDP) - ANSWER-The sum of value added by resident firms,
households, and governments operating in an economy.
Gross national income (GNI) - ANSWER-GDP plus income from non-resident sources
abroad. The term used by the World Bank and other international organizations to
supersede the term GNP.
Gross national product (GNP) - ANSWER-GDP plus income from non-resident sources
abroad
Group of 20 (G-20) - ANSWER-The group of 19 major countries plus the European
Union (EU) whose leaders meet on a biannual basis to solve global economic problems.
,International business (IB) - ANSWER-(1) A business (or firm) that engages in
international (cross-border) economic activities and/or (2) the action of doing business
abroad.
International premium - ANSWER-A significant pay raise when working overseas.
Liability of foreignness - ANSWER-The inherent disadvantage that foreign firms
experience in host countries because of their non-native status.
Multinational enterprise (MNE) - ANSWER-A firm that engages in foreign direct
investment (FDI).
Nongovernmental organization (NGO) - ANSWER-An organization that is not affiliated
with governments.
Purchasing power parity (PPP) - ANSWER-A conversion that determines the equivalent
amount of goods and services that different currencies can purchase.
Reverse innovation - ANSWER-An innovation that is adopted first in emerging
economies and is then diffused around the world.
Risk management - ANSWER-The identification and assessment of risks and the
preparation to minimize the impact of high-risk, unfortunate events.
Scenario planning - ANSWER-A technique to prepare and plan for multiple scenarios
(either high or low risk).
Semiglobalization - ANSWER-A perspective that suggests that barriers to market
integration at borders are high, but not high enough to insulate countries from each
other completely.
Triad - ANSWER-North America, Western Europe, and Japan.
Purchasing power parity (PPP) - ANSWER-adjustment made to the GDP to reflect
differences in the cost of living
The bottom billion - ANSWER-Concentrated in Africa and Central Asia - 58 small
countries, stuck at the bottom in terms of growth, incomes and human development
,Enhance employability & advance career, better preparation to be expat, competence in
interacting with foreign suppliers/partners/competitors/employees - ANSWER-Why
study global business?
Institution-based view - ANSWER-A core perspective. Success and failure of firms are
constrained by institutions
Formal rules - ANSWER-requirements that treat domestic and foreign firms as equals
enhance the potential odds
for foreign firms' success or those that discriminate against foreign firms, would
undermine the chances for foreign entrants
Informal rules - ANSWER-cultures, ethics, and norms play an important part in shaping
the success and failure of firms around the globe
Resource-based view - ANSWER-A core perspective. Success and failure of firms is
determined by their environment
New force in recent times, a long-running historical evolution, a pendulum swinging
between extremes - ANSWER-What are the three views of globalization?
"Four Tigers" - ANSWER-Hong Kong, Singapore, South Korea and Taiwan
Absolute advantage - ANSWER-The economic advantage one nation enjoys that is
absolutely superior to other nations.
Administrative policy - ANSWER-Bureaucratic rules that make it harder to import foreign
goods.
antidumping duty - ANSWER-Tariffs levied on imports that have been "dumped" (selling
below costs to "unfairly" drive domestic firms out of business).
Balance of Trade - ANSWER-The aggregation of importing and exporting that leads to
the country-level trade surplus or deficit.
Classical trade theories - ANSWER-The major theories of international trade that were
advanced before the 20th century, which consist of (1) mercantilism, (2) absolute
advantage, and (3) comparative advantage.
, Comparative advantage - ANSWER-Relative (not absolute) advantage in one economic
activity that one nation enjoys in comparison with other nations.
Deadweight cost - ANSWER-Net losses that occur in an economy as a result of tariffs.
Export - ANSWER-Selling abroad.
Factor endowment - ANSWER-The extent to which different countries possess various
factors of production such as labor, land, and technology.
Factor endowment theory - ANSWER-A theory that suggests that nations will develop
comparative advantages based on their locally abundant factors.
Heckscher-Ohlin theory - ANSWER-Another name for factor endowment theory
First-mover advantage - ANSWER-Advantage that first movers enjoy and do not share
with late entrants.
Free trade - ANSWER-The idea that free market forces should determine how much to
trade with little or no government intervention.
Import - ANSWER-Buying from abroad.
Import quota - ANSWER-Restriction on the quantity of imports.
Import tariff - ANSWER-A tax imposed on imports.
Infant industry argument - ANSWER-The argument that if domestic firms are as young
as "infants," in the absence of government intervention, they stand no chances of
surviving and will be crushed by mature foreign rivals.
Local content requirement - ANSWER-A requirement stipulating that a certain
proportion of the value of the goods made in one country must originate from that
country.
Merchandise - ANSWER-Tangible products being traded.
Modern trade theories - ANSWER-The major theories of international trade that were
advanced in the 20th century, which consist of (1) product life cycle, (2) strategic trade,
and (3) national competitive advantage of industries.
Base of the pyramid (BOP) - ANSWER-Economies where people make less than
$2,000 per capita per year.
BRICA - ANSWER-Brazil, Russia, India, and China.
Emerging economies - ANSWER-term that has gradually replaced the term "developing
countries" since the 1990s.
Emerging markets - ANSWER-A term that is often used interchangeably with "emerging
economies."
Expatriate manager - ANSWER-A manager who works abroad, or "expat" for short.
Foreign direct investment (FDI) - ANSWER-Investment in, controlling, and managing
value-added activities in other countries.
Global Business - ANSWER-Business around the globe.
Globalization - ANSWER-The close integration of countries and peoples of the world.
Gross domestic product (GDP) - ANSWER-The sum of value added by resident firms,
households, and governments operating in an economy.
Gross national income (GNI) - ANSWER-GDP plus income from non-resident sources
abroad. The term used by the World Bank and other international organizations to
supersede the term GNP.
Gross national product (GNP) - ANSWER-GDP plus income from non-resident sources
abroad
Group of 20 (G-20) - ANSWER-The group of 19 major countries plus the European
Union (EU) whose leaders meet on a biannual basis to solve global economic problems.
,International business (IB) - ANSWER-(1) A business (or firm) that engages in
international (cross-border) economic activities and/or (2) the action of doing business
abroad.
International premium - ANSWER-A significant pay raise when working overseas.
Liability of foreignness - ANSWER-The inherent disadvantage that foreign firms
experience in host countries because of their non-native status.
Multinational enterprise (MNE) - ANSWER-A firm that engages in foreign direct
investment (FDI).
Nongovernmental organization (NGO) - ANSWER-An organization that is not affiliated
with governments.
Purchasing power parity (PPP) - ANSWER-A conversion that determines the equivalent
amount of goods and services that different currencies can purchase.
Reverse innovation - ANSWER-An innovation that is adopted first in emerging
economies and is then diffused around the world.
Risk management - ANSWER-The identification and assessment of risks and the
preparation to minimize the impact of high-risk, unfortunate events.
Scenario planning - ANSWER-A technique to prepare and plan for multiple scenarios
(either high or low risk).
Semiglobalization - ANSWER-A perspective that suggests that barriers to market
integration at borders are high, but not high enough to insulate countries from each
other completely.
Triad - ANSWER-North America, Western Europe, and Japan.
Purchasing power parity (PPP) - ANSWER-adjustment made to the GDP to reflect
differences in the cost of living
The bottom billion - ANSWER-Concentrated in Africa and Central Asia - 58 small
countries, stuck at the bottom in terms of growth, incomes and human development
,Enhance employability & advance career, better preparation to be expat, competence in
interacting with foreign suppliers/partners/competitors/employees - ANSWER-Why
study global business?
Institution-based view - ANSWER-A core perspective. Success and failure of firms are
constrained by institutions
Formal rules - ANSWER-requirements that treat domestic and foreign firms as equals
enhance the potential odds
for foreign firms' success or those that discriminate against foreign firms, would
undermine the chances for foreign entrants
Informal rules - ANSWER-cultures, ethics, and norms play an important part in shaping
the success and failure of firms around the globe
Resource-based view - ANSWER-A core perspective. Success and failure of firms is
determined by their environment
New force in recent times, a long-running historical evolution, a pendulum swinging
between extremes - ANSWER-What are the three views of globalization?
"Four Tigers" - ANSWER-Hong Kong, Singapore, South Korea and Taiwan
Absolute advantage - ANSWER-The economic advantage one nation enjoys that is
absolutely superior to other nations.
Administrative policy - ANSWER-Bureaucratic rules that make it harder to import foreign
goods.
antidumping duty - ANSWER-Tariffs levied on imports that have been "dumped" (selling
below costs to "unfairly" drive domestic firms out of business).
Balance of Trade - ANSWER-The aggregation of importing and exporting that leads to
the country-level trade surplus or deficit.
Classical trade theories - ANSWER-The major theories of international trade that were
advanced before the 20th century, which consist of (1) mercantilism, (2) absolute
advantage, and (3) comparative advantage.
, Comparative advantage - ANSWER-Relative (not absolute) advantage in one economic
activity that one nation enjoys in comparison with other nations.
Deadweight cost - ANSWER-Net losses that occur in an economy as a result of tariffs.
Export - ANSWER-Selling abroad.
Factor endowment - ANSWER-The extent to which different countries possess various
factors of production such as labor, land, and technology.
Factor endowment theory - ANSWER-A theory that suggests that nations will develop
comparative advantages based on their locally abundant factors.
Heckscher-Ohlin theory - ANSWER-Another name for factor endowment theory
First-mover advantage - ANSWER-Advantage that first movers enjoy and do not share
with late entrants.
Free trade - ANSWER-The idea that free market forces should determine how much to
trade with little or no government intervention.
Import - ANSWER-Buying from abroad.
Import quota - ANSWER-Restriction on the quantity of imports.
Import tariff - ANSWER-A tax imposed on imports.
Infant industry argument - ANSWER-The argument that if domestic firms are as young
as "infants," in the absence of government intervention, they stand no chances of
surviving and will be crushed by mature foreign rivals.
Local content requirement - ANSWER-A requirement stipulating that a certain
proportion of the value of the goods made in one country must originate from that
country.
Merchandise - ANSWER-Tangible products being traded.
Modern trade theories - ANSWER-The major theories of international trade that were
advanced in the 20th century, which consist of (1) product life cycle, (2) strategic trade,
and (3) national competitive advantage of industries.
