International Business Quiz 2

Mercantilism – This trade theory views world trade as a zero-sum game
Political Arguments Favouring Government Intervention – – protecting jobs and industries
– national security
– retaliation
– consumer protection
– protecting human rights
Tacit Knowledge – Knowledge that is non-codifieable, and whose acquisition and transfer require hands-on practice.
The optimal entry mode depends to some degree on the nature of a firm's: – Core competencies
embargo – A complete ban on international trade of a certain item, or a total halt in trade with a particular nation
less developing country [LDC] – a country with little economic wealth and an emphasis on agriculture or mining
Tribal Totalitarianism – A political system in which a party, group or individual that represents the interests of a particular tribe (ethnic group) monopolizes political power
entry mode – institutional arrangement by which a firm gets its products, technologies, human skills, or other resources into a market
T/F
The preeminent strategic goal for most firms is to maximize the value of the firm for its owners – True
Global company – organization that attempts to standardize and integrate operations worldwide in all functional areas
Brazil, Russia, India, and China – BRIC
Bretton Woods agreement – agreement in 1944 among nations to create a new international monetary system based on the value of US dollar
Global company – organization that attempts to standardize and integrate operations worldwide in all functional areas
economic system – Globalization is the contemporary international ___________, emerged as the Cold War ended
3. Tariff – tax levied on imported products
Which activities does it make sense to outsource and which ones should we keep in house? – Activities that are highly commoditized should be outsourced. If an activity is firm specific and industry specific it should be kept in-house. If an activity is firm specific yet common across industries there are no clear guidelines for how to proceed.
When foreign subsidiaries are unable to purchase raw materials and machinery locally, – they generally look for assistance from the purchasing department at headquarters.
Ricardo Theories – Comparative advantage: Trade us a positive sum game in which all gain. Potential world production is greater with unrestricted free trade than it is with restricted trade. Provides a strong rationale for encouraging free trade.

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