WGU C211 Chapter 1 questions and answers

International Business (IB) A business (or firm) that engages in international (cross-boarder) economic activities. Multinational Enterprise (MNE) A firm that engages in foreign direct investment. Foreign Direct Investment (FDI) When a business participates in investing, controlling, and managing value-added activities in other countries. International Focuses on foreign entrants Business Port Includes domestic businesses Global Business Business around the Globe. Emerging Economies Replaced the term "developing countries" Purchasing Power Parity (PPP) A conversion that determines the equivalent amounts of goods & services that different currencies can purchase. Gross Domestic Product (GDP) Measured as the sum of value added by resident firms, households, & governments operating in an economy (doesn't include non-residents). Gross National Product (GNP) Is the GDP + income from non-resident sources abroad. Also called (GNI) Gross National Income. BRIC BRAZIL, RUSSIA, INDIA, CHINA BRICS BRIC +SOUTH AFRICA BRICM BRIC + MEXICO BRICET BRIC + EASTERN EUROPE & TURKEY Top Tier Pyramid GDP$20,000 with appx. 1 billion people. Consists of the TRIAD Countries (North America, Western Europe, & Japan). Second Tier Pyramid GDP= $2,000 - $20,000 with appx. 1 billion people. Base of Pyramid GDP $2,000 with apprx. 5 billion people. Most emerging economies. Reverse Innovation Innovation that is adapted first in the emerging economies & then is diffused around the world. Bottom Up innovation. G20 Has 19 members + the European Union. Institution Based Core Perspective The Success & Failure of firms are enabled & constrained by institutions. Institutions Rules of the game Formal Rules Laws Informal Rules Values Resource Based Core Perspective Focuses on a firm's internal resources & capabilities. Liability of foreignness Inherent disadvantage that foreign firms experience in host countries because of their non-native status. Globalization The close integration of countries & peoples of the world. Like a pendulum swing Semiglobalization Suggests that barriers to market integration at borders are high, but not high enough to insulate countries from each other completely. Nongovernmental Organizations (NGO) An organization that is not affiliated with