IB exam one

GATT

International treaty that committed signatories to lowering barriers to the free flow of goods across national borders and led to the WTO.

WTO

Organization that succeeded the General Agreement on Tariffs and Trade (GATT) as a result of the successful completion of the Uruguay Round of GATT negotiations.

IMF

International institution set up to maintain order in the international monetary system. (For emergencies to make sure economies do not collapse)

World Bank

International institution set up to promote general economic development in the world’s poorer nations.

Moore’s Law

The power of microprocessor technology doubles and its costs of production fall in half every 18 months.

MNE

A firm that owns business operations in more than one country.

It is common practice for people today to use products that are produced or assembled in various nations around the world. This is a reflection of

Globalization

The globalization of Blank______ is the term used to describe the merging of national markets into one large global place.

Markets

When Jerry started his small appliance manufacturing company in the 1950s, every component part was made in the United States and the product was assembled in the United States. Today, he sources the components from China. The change at this company is an example of the Blank______.

Globalization of production

Land, labor, capital, and energy are all examples of factors of Blank______.

Production

The International Monetary Fund and the World Bank are both examples of Blank______ that help govern the global business system.

Global Institutions

Which statement best describes the International Monetary Fund (IMF)?

The IMF is often seen as the lender of last resort to nation states whose economies are in turmoil.

The World Trade Organization (WTO) is the successor to Blank______.

GATT

The negotiations called the Blank______, finalized in December 1993, established the World Trade Organization to police the international trading system.

Uruguay Round

The Uruguay Round negotiations resulted in

lowering the trade barriers between various national markets.

Select the four facts that described the demographics of the global economy up until the 1960s. 

• The dominance of large, multinational U.S. firms in the international business scene

• U.S. dominance in world foreign direct investment

• Roughly half of the globe was off-limits to Western international business

• U.S. dominance in the world economy and world trade

According to the critics of globalization, which of the following are results of falling trade barriers?

• The destruction of manufacturing jobs in advanced economies

• A depression of wages in developed nations

China, India, and Indonesia are expected to be among the world’s seven largest economies by 2050. Economic development in a country can be measured using

Gross National Income

The main reason that gross domestic product (GDP) figures can be misleading is because they

Do not consider differences in the cost of living

Common Law

A system of law based on tradition, precedent, and custom; when law courts interpret common law, they do so with regard to these characteristics.

Civil Law

A system of law based on a very detailed set of written laws and codes.

Private Action

Violation of property rights through theft, piracy, blackmail, and the like by private individuals or groups.

Public Action

The extortion of income or resources of property holders by public officials, such as politicians and government bureaucrats.

______ totalitarianism occurs when a political party that represents the interests of a particular tribe monopolizes power.

Tribal

A pseudo-democracy is the term given to a nation in which

the government is in control of the machinery of the state and uses this power to deny political and civil liberties.

The purpose of a(n) Blank______ payment is to facilitate the performance of duties that a government has already obligated itself to do.

Grease

What is considered a yardstick for the economic activity of a country?

GDP

The GDP per capita of a country is $5,000, but the PPP per capita is $8,000. What can be inferred from the given data?

The cost of living is lower in that country than the United States.

To foster innovation in the business environment, it is important that strong legal protection of property rights is in place. Inadequately enforced property rights can lead to an increase in the

risk of expropriation of profits.

Which of these situations relates to Sachs's view on a country's economic development?

Country A has the benefit of nutrient-rich soil which provides a competitive advantage for the country's tobacco industry.

The Heritage Foundation index of economic freedom is based on 10 indicators. Which of the following are included in that index?

• Taxation rules

• Labor freedom

• Trade policy

• Foreign investment regulations

Jeffrey Sachs argued that the Blank______ of a nation can have an impact on economic development.

Geography

When assessing the legal factors that determine the cost of doing business in a country, it's important to know that

it can be more costly to do business in a country where local laws and regulations set strict standards with regard to product safety.

Economic risks are independent of political risks.

False

Command Economy

An economic system where the allocation of resources, including determination of what goods and services should be produced, and in what quantity, is planned by the government.

Purchasing Power Parity

Adjustment in GDP per capita to reflect differences in the cost of living. Adjusted depending on whether the cost of living is higher or lower then living in the United States.

FDI

Buy/own assets in another country

Expropriation

Government takes private property

Nationalization

Government takes entire industry

Frontier Market

• Between emerging and developing

• Too small and risky to be considered emerging

Emerging markets

Transitioning rapidly toward developed status

Developing markets

Slow economic growth

ISA Reports & Forecasts

Provides information, analysis and data on international markets

Global Edge

Knowledge web-portal providing insights and learning resources on global business activities

EIU Democracy Index

Index measures the quality of democracy around the world

Business Ready (B-Ready)

Published by the World Bank, reports assess global business environments, public services and operational efficiency.

Economic Freedom Index

Economic freedom based on twelve factors grouped into four broad categories of economic freedom (Rule of law, government size, regulatory efficiency, open markets)

Human Development Index

Three key dimensions of human development