International Marketing Chapter 2: Global Economic Environment

Economic Systems

Systems that determine how resources are allocated and owned within an economy, including capitalism, socialism, and mixed economies.

Capitalism

An economic system emphasizing private ownership and market-driven economies.

Socialism

An economic system focused on state ownership and government-planned economies.

Mixed Economies

Economic systems that incorporate elements of both capitalism and socialism.

Balance of Payments

A comprehensive record of a country's economic transactions with the rest of the world, including current and capital accounts.

Current Account

A component of the balance of payments that includes merchandise trade, services trade, and certain financial transfers.

Capital Account

A component of the balance of payments recording long-term direct investment and capital flows.

Emerging Markets

Countries transitioning from low to middle income, exhibiting rapid economic growth and increased global trade potential.

Market Capitalism

An economic system where individuals and firms decide on resource allocation, with private ownership and minimal government intervention.

Centrally Planned Socialism

An economic system in which the state controls the economy, with centralized decision-making and state ownership of resources.

Economic Development Categories

The classification of countries by income levels, including low-income, middle-income, and high-income categories.

Sachet Economy

A market characterized by selling consumer goods in small, single-use packages due to affordability and space constraints.

Foreign Direct Investment (FDI)

Investment made by a company or individual in one country in business interests in another country.

BRICS Nations

A group of five major emerging economies: Brazil, Russia, India, China, and South Africa.

Postindustrial Society

A stage of economic development characterized by the dominance of the service sector and knowledge over traditional industrial outputs.

G-7

A group comprising Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States that collaborates to foster global economic stability.

Big Mac Index

An informal measure of currency valuation based on the price of a Big Mac burger in different countries.