International Business and Trade Theories: Key Concepts and Frameworks

What is the Basic Intention of GATT and WTO?

To promote free trade among nations.

What is an exchange rate?

The price of one currency in terms of a second currency.

What does the gold standard refer to?

The pre-World War I global monetary system that used gold as the basis of international economic exchange.

What is a floating currency?

A currency whose value increases or decreases based on demand and supply.

What is Bitcoin?

A widely known digital currency.

What was the significance of the Bretton Woods Agreement?

It was the first formal institution that governed international monetary systems.

What are examples of reserve currencies?

The U.S. dollar, euro, British pound, Swiss franc, and Japanese yen.

Which country was removed from the G8?

Russia, leading to the formation of the G7.

What were the IMF's greatest challenges since the Great Depression?

The 2008 recession and the 2020 pandemic.

What is a criticism of the World Bank?

It has shifted from being an international welfare organization to a 'lender of last resort.'

What is foreign exchange?

The money of one country denominated in the currency of another country or a group of countries.

What is currency hedging?

The technique of protecting against potential losses from adverse changes in exchange rates.

What is currency speculation?

The practice of buying and selling a currency with the expectation that its value will change and result in profit.

What is an indirect quote in foreign exchange?

An approach where foreign exchange rates are expressed in terms of the number of currency units that can be exchanged for a U.S. dollar.

What is a forward contract?

An agreement to buy or sell a currency at a predetermined future date and price.

What is a secondary market?

A market where previously issued securities are traded.

What are offshore financial centers?

Countries with few rules governing the financial sector and low overall taxes.

What is venture capital?

Investment made in an early- or growth-stage company.

What was the impact of Brexit on London?

It had a negative impact on London as a world financial center.

What is the purpose of accounting?

To communicate the organization's financial position to stakeholders.

What is finance?

The overall strategy of a company regarding funding operations successfully.

What is the stock market?

The organized trading of securities through exchanges.

What are accounting standards?

A system of rules and principles that prescribe the format and content of financial statements.

What is a regional economic agreement?

An agreement among countries to facilitate trade and economic cooperation.

What was NAFTA?

The first North America's Regional Free Trade Agreement, now improved and called USMCA.

What is the United Nations' role?

To promote peace and cooperation among nations.

How does the UN fund itself?

Through member countries' assessments and contributions.

What is the importance of understanding cultural differences in business?

It is essential to understand the national culture where you are operating.

What is the main job of professionals in multinational companies?

To ensure coexistence of both local and corporate cultures.

What do people with low uncertainty avoidance prefer?

They prefer to take on risks and exhibit less aggressiveness.

What characterizes low-context culture?

People tend to be explicit and direct in their communication.

What does high power distance mean in cultures like Japan and Korea?

There is a formal respect and authority given to the 'boss' and the hierarchy.

What is a best practice when communicating professionally through email?

It is best to get right to the point and include a salutation and introduction.

What does corruption refer to?

Gaining advantage through immoral and illegal means.

What is a grease payment?

It is considered unethical.

What does the Foreign Corrupt Practices Act specifically ban?

It specifically bans any form of bribery.

What does Corporate Social Responsibility relate to?

It relates to caring for the environment, conducting business ethically, and caring for stakeholders.

What happens when an organization loses its ability to be creative?

They are referred to as experiencing 'Brain Rot.'

What is talent management?

It is about anticipating the need for human capital and planning to meet it.

Which is not a key element of Human Resource Management?

Diversity, Equity, Inclusion, and Accessibility.

Does diversity in a group help avoid Group Think?

True.

How much more likely are companies that exhibit diversity to outperform those that don't?

By 15% for gender diversity and 35% for ethnic diversity.

What does it mean when companies are 'buying' employees?

They are hiring someone with an existing set of knowledge and skills to contribute immediately.

Why is achieving cultural diversity important in talent management?

It brings about open-mindedness across cultures.

What does hiring a 'right' worker mean?

It means hiring someone whose goals and aspirations match those of the company.

Why should a corporation align its HR management with strategic objectives?

So that the 'right' worker not only understands the job but whose goals match those of the company.

What must tests given to job candidates follow to be legal?

They must be job-related and follow guidelines set forth by the U.S. Equal Employment Opportunity Commission.

Who organized Trade Theories and encouraged Free Trade?

Adam Smith.

Does today's calculation for GDP include Black Market transactions?

False.

When comparing GDP per capita, which country has a higher GDP per capita, Argentina or Norway?

Norway has a higher GDP per capita.

What is the original meaning of 'Third World'?

Countries that were not aligned to the USA or Russia.

Is it wise to call developing countries 'Third World' today?

No.

What does BRICS stand for?

Brazil, Russia, India, China, South Africa.

What does the economic theory of mercantilism state?

A country's wealth is determined by the amount of its gold and silver holdings.

What is Neo-Mercantilism?

It aims to create a trade deficit using methods like tariffs to boost local production.

What is true about modern international trade theories?

They explain trade from a firm, rather than a country, perspective.

What is a key part of government efforts to attract foreign investment?

Political stability.

What is the benefit of understanding business theories today?

To understand barriers to entry and when to exit.

Which political philosophy is least desirable?

Totalitarianism.

Why do governments and firms worry about Foreign Direct Investment?

Due to political stability, economic success, and societal/cultural factors.

What are investors interested in when it comes to portfolio investment?

Diversifying investment risk through multiple markets.

Why do some host countries encourage local ownership?

To keep control of local markets or industries in their citizens' hands.

What is not a determinant in Porter's national competitive advantage theory?

Local government stability.

What are Porter's linked determinants in national competitive advantage?

Local markets, resources, and suppliers.

Who stated that a nation's competitiveness depends on its industry's capacity to innovate?

Porter's national competitive advantage theory.

What does the Human Development Index refer to?

The measurement of a country's average achievements in health, knowledge, and a decent standard of living.

What is Comparative Advantage?

It occurs when a country can produce a product more efficiently than other goods.

What is true about Sharia?

It prohibits charging interest on money and other common investment activities.

What does Foreign Direct Investment refer to?

The investment in foreign assets with the intent to control and manage them.