ITB Final

What is economic globalization?

Countries around the world are becoming more connected and dependent on each other through trade, investment, technology, and the movement of people and information.

Why is understanding cultural differences important in a global business?

Because culture norms affect communication, management styles, decision-making, and business negotiations.

Why is understanding legal differences important in global business?

Different countries have different laws regarding business practices, which can affect contracts, intellectual property, labor, and taxation.

Why do nations trade with one another?

To access goods and services they cannot produce efficiently, to benefit from comparative advantage, and to expand their markets.

How is international trade measured?

Exports and Imports, Trade Volume, GPD

Exports:

What a country sells to other countries.

Imports:

What a country buys from other countries.

Trade Balance:

The difference between exports and imports.

Trade Surplus:

If a country exports more than it imports.

Trade Deficit:

If it imports more that exports.

Trade Volume:

The total amount of exports and imports combined.

GDP (Gross Domestic Product):

Sometimes used to compare how big trade is compared to the whole economy.

What is free trade?

International trade left to run its course without tariffs, quotas, or other government restricions restrictions.

What is protectionsm?

The practice of shileding a country's domestic industres from foreign compettion by taxing imports.

What are some examples of government intervention in international trade?

Tariffs, subsidies, import quotas, and trade sanctions.

Wat conflicts can arise in global business?

Conflicts may incldue trade disputes, political tensions, regulatory differences, and ethical issues.

What is the role of the World Trade Organization (WTO)?

To promote free trade by enforcing trade rules and resolving disputes between countries.

What is the role of the International Monetary Fund (IMF)?

To provide short-term financial assistance to countries and promote global monetary cooperation.

What is the role of the World Bank?

To provide financial and technical assistance to developing countries for development programs.

What was the “Planet Money Makes a T-Shirt” video about?

It followed the journey of a t-shirt thorugh the gloabl supply chain to illustrate economic globalization and trade.

What is a small business?

A business that is independently owned and operated, is not dominant in its field, and meets certain size standards in terms of employees or revenue.

What percentage of U.S. businesses are classified as small businesses?

Over 99%.

How do small businesses contribute to the U.S. economy?

They create jobs, foster innovation, support local economies, and serve niche markets.

WHat are common reasons people start their own businesses?

Desire for independence, financial potentials, passion for a product or service, flexibility, and to fill a market gap.

What are common traits of successful entreprenerus?

Creativity, vision, resilience, willingness to take risks, self-motivation, and problem-solving skills.

What are major causes of business failure?

Poor management, insufficient capital, lack of planning, market misjudgment, and rapid growth without control.

What does “pivoting” mean in entrepreneurship?

Changing the direction of a business to adapt to market feedback or challenges, often by modifying the product, startegy, or target market.

Where can entrepreneurs find advice and support?

Small Business Administration (SBA), mentors, business incubators, professional networks, and online resources.

What are the principal sources for funding new business?

Personal savings, loans, angel investors, venture capital, crowdfunding, and grants.

What is the main difference between accounting and finance?

Accounting focuses on recording and reporting past financial transactions; finance focuses on managing current and future financial resources and decision-making.

What is the role of an accountant?

To track, classify, and report financial transactions to ensure accuracy and regulatory compliance.

What is the role of a finance professional?

To make strategic decisions about budgeting, investing, and raising capital to improve a company’s financial health.

What are the three fundamental concepts that affect financial decisions?

1. Time value of money

2. Risk and return tradeoff

3. Cash flow management

What is the time value of money?

The concept that a dollar today is worth more than a dollar in the future due to its earning potential m.

What is the risk-return trade off?

The principal that potential return rises with an increase in risk.

Why is cash flow management important?

It ensures that a business has enough liquidity to meet short-term obligations and operate smoothly.

What are the primary responsibilities of a financial manager?

Planning for financial needs, managing cash flow, analyzing investment opportunities, and securing funding.

What is debt financing?

Borrowing money that must be repaid with interest, such as loans or bonds.

What is equity financing?

Raising capital by selling shares of ownership in the business.

What are the advantages of debt financing?

No ownership dilution and interest is tax-deductible.

What are the disadvantages of debt financing?

Repayment obligations and interest can stain cash flow.

What are the advantages of equity financing?

No repayment required and access to investor expertise and networks.

What are major considerations when choosing between debt and equity financing?

Cost of capital, impact on ownership/control, financial condition of the company, and long-term business goals.