C211 GLOBAL ECONOMICS FOR MANAGERS.100% CORRECT

Base of the pyramid (BOP) -ANSWER- Economies where people make less than $2,000 per capita per year Approx 5 billion people second tier -ANSWER- per capita GDP/GNI $ approx 1 billion people top tier -ANSWER- per capita GDP/GNI > $20000 approx 1 billion people BRIC -ANSWER- Brazil, Russia, India, and China. Emerging economies -ANSWER- term that has gradually replaced the term "developing countries" since the 1990s. mid-range emerging economies (india) -ANSWER- strong institutional dev less infrastructure newly developed economies (south korea) -ANSWER- strong institutional dev more infrastructure mid-range emerging economies (belarus) -ANSWER- weak institutional dev less infrastructure traditional emerging economies (china) -ANSWER- weak institutional dev more infrastructure 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. vertical FDI -ANSWER- duplicates same value chain in host country horizontal FDI -ANSWER- upstream or downstream in diff value chain in host country Global Business -ANSWER- Business around the globe. Globalization -ANSWER- The close integration of countries and peoples of the world. understanding what globalization is -ANSWER- • Some view globalization as a recent phenomenon, • and others believe that it has been a one-directional evolution since the dawn of human history. • We suggest that globalization is best viewed as a process similar to the swing of a pendulum. Gross domestic product (GDP) -ANSWER- The sum of value added by resident firms, households, and governments operating in an economy. total size of (calculated at the official, nominal exchange rate) is approximately $60 trillion 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. G7 -ANSWER- italy, france, germany, japan, UK, canada, US 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. expatriate manager -ANSWER- A manager who works abroad, or "expat" for short. 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. adjustment made to the GDP to reflect differences in the cost of living 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. What determines the success and failure of firms around the globe? -ANSWER- 1. the institution-based view and 2. the resource-based view. 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 Difference btwn international business and global business -ANSWER- In many cases, international business refers to domestic firms expanding into international (cross-border) economic activities; here, global business also includes domestic firms' strategies for competing against foreign firms entering their home territory. nongovernmental organizations (NGOs) -ANSWER- An organization that is not affiliated with governments. Why study global business? -ANSWER- Enhance employability & advance career better preparation to be expat competence in interacting with foreign suppliers/partners/competitors/employees Institution-based view -ANSWER- A core perspective. Success and failure of firms are constrained by institutions Formal and informal rules of the game 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 Firm specific resources and capabilities 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 evolved from approximately 300 to 400 years ago to 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.