BA 335 International Business

Globalization

A shift toward a more integrated and interdependent world economy

Globalization of Markets

The merging of historically distinct and separate national markets into one huge global marketplace

Globalization of Production

Sourcing of goods and services from locations around the globe to take advantage of national diffrences in the cost and quality of factors of production (labor, energy, land and capital)

Political Economy

The political, economic, and legal systems that are interdependent; affected by and shaping societal culture

Political System

System of government in a nation; political systems assessed in terms of degree to which they emphasize collectivism as opposed to…

Collectivism

system that stresses the privacy of collective goals over individual goals

Socialists

those who believe in public ownership of the means of production for the common good of society

Communists

believed socialism could only be achieved through violent revolution and totalitarian dictatorhsip; in retreat worldwide by mid-1990s

Social democrats

worked to achieve same goals by democratic means

International Monetary System

The institutional arrangement that governs exchange rates; recall that the foreign exchange market is the primary institution for determining exchange rates

Floating exchange rate system

Where the foreign exchange market determines the relative value of a currency

Pegged exchange rate system

When the value of a currency is fixed to a reference country and then the exchange rate between that currency and other countries’'

Managed-float or dirty-float system

When the value of a currency is determined by market forces, but with central bank intervention if it depreciates too rapidly against an important reference currency

Fixed exchange rate system

countries fix their currency against each other at a mutually agreed upon value

European Monetary System (EMS)

Prior to the introduction of the euro, how eu countries operated with fixed exchange rates within the context