BUSI 311 FINAL QUESTIONS AND ANSWERS EXAM LATEST
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GATT
General Agreement on Tariffs and Trade ; created in 1948
WTO
The World Trade Organization - an international body that enforces agreements that
reduce barriers to international trade; successor to the GATT
Eurpean Union (EU)
Union of 27 trading partners in Europe
What are some of the benefits to global integration?
1. Political (promote peace and confidence)
2. Economical (disputes are handled better, the rules make life easier)
what determines foreign exchange rates? (supply & demand) RPD PPP IR MS
PBP ERP IP
(1) Relative Price Differences and Purchasing Power Parity (2) Interest rates and
money supply (3) Productivity and balance of payments (4) Exchange rate policies (5)
Investor psychology
strategies that counteract currency fluctuations: ic ch sh
1. Invoice Currency
2. Currency Hedging
3. Strategic Hedging
international monetary fund
lender of last resort
world bank
long term approach : eradication of poverty
Bretton Woods System
Named for a conference held at Bretton Woods, New Hampshire, in 1944, this system
provided the foundation for postwar economic globalization, including the World Bank
and the International Monetary Fund; based on the promotion of free trade, stable
currencies, and high levels of capital investment.
Two of the B-W institutions left
1. World Bank
2. International Monetary Fund
Global Economic Integration
Most fundamental goal is to promote peace; efforts to eliminate barriers around the
globe
Negative Impacts of Global Integration ELW HA
1. Exploits low-wages
2. Hedonic adaptation
Mercantilists believe...
against free trade
Those against free trade
, that regional economic integration is the next best thing to global economic trade
Regional Economic Integration
Efforts used to reduce trade & investment barriers within one region
Institution Based View
- regulatory risk
- trade & investment barriers
- differences in cultures; norms & values
Resource Based View
VRIO framework
The biggest risk to entering a market in a foreign firm is...
Liability of foreigness
Strategic Goals
Natural Resources Seeking, Market Seeking, Efficiency Seeking, Innovation Seeking
Market Seeking
abundance of strong market demand & customers willingness to pay
Efficiency Seeking
Economics of scale and abundance of low-cost factors
Innovation Seeking
Abundance of innovative individuals, firms and universities
Overcoming Cultural Differences 2 divergent theories
1. Staged Entry 2. Strategy > culture
First Mover Advantage
proprietary, technological innovation, preemption of scarce resources, establishment of
entry for late entrants, relationships with stakeholders, avoid clash with dominant firms
at home
Late-Mover Advantages
Opportunity to free ride on first mover investment, resolution of technological & market
uncertainty, first movers' difficulty to adapt to market changes
Types of Alliances
1. Contractual Alliances
2. Entry-based Alliances
3. Strategic Alliances
Why do acquisitions happen?
1. synergetic motives
2. hubristic motives
3. managerial motives
Pre-acquisition
overpayment
Post-acquisition
Failure to integrate
Inflation
A general and progressive increase in prices
delfation
a decrease in the general level of prices
appreciation of currency
a rise in the price of one currency relative to another
UPDATE.Buy Quality Materials!
GATT
General Agreement on Tariffs and Trade ; created in 1948
WTO
The World Trade Organization - an international body that enforces agreements that
reduce barriers to international trade; successor to the GATT
Eurpean Union (EU)
Union of 27 trading partners in Europe
What are some of the benefits to global integration?
1. Political (promote peace and confidence)
2. Economical (disputes are handled better, the rules make life easier)
what determines foreign exchange rates? (supply & demand) RPD PPP IR MS
PBP ERP IP
(1) Relative Price Differences and Purchasing Power Parity (2) Interest rates and
money supply (3) Productivity and balance of payments (4) Exchange rate policies (5)
Investor psychology
strategies that counteract currency fluctuations: ic ch sh
1. Invoice Currency
2. Currency Hedging
3. Strategic Hedging
international monetary fund
lender of last resort
world bank
long term approach : eradication of poverty
Bretton Woods System
Named for a conference held at Bretton Woods, New Hampshire, in 1944, this system
provided the foundation for postwar economic globalization, including the World Bank
and the International Monetary Fund; based on the promotion of free trade, stable
currencies, and high levels of capital investment.
Two of the B-W institutions left
1. World Bank
2. International Monetary Fund
Global Economic Integration
Most fundamental goal is to promote peace; efforts to eliminate barriers around the
globe
Negative Impacts of Global Integration ELW HA
1. Exploits low-wages
2. Hedonic adaptation
Mercantilists believe...
against free trade
Those against free trade
, that regional economic integration is the next best thing to global economic trade
Regional Economic Integration
Efforts used to reduce trade & investment barriers within one region
Institution Based View
- regulatory risk
- trade & investment barriers
- differences in cultures; norms & values
Resource Based View
VRIO framework
The biggest risk to entering a market in a foreign firm is...
Liability of foreigness
Strategic Goals
Natural Resources Seeking, Market Seeking, Efficiency Seeking, Innovation Seeking
Market Seeking
abundance of strong market demand & customers willingness to pay
Efficiency Seeking
Economics of scale and abundance of low-cost factors
Innovation Seeking
Abundance of innovative individuals, firms and universities
Overcoming Cultural Differences 2 divergent theories
1. Staged Entry 2. Strategy > culture
First Mover Advantage
proprietary, technological innovation, preemption of scarce resources, establishment of
entry for late entrants, relationships with stakeholders, avoid clash with dominant firms
at home
Late-Mover Advantages
Opportunity to free ride on first mover investment, resolution of technological & market
uncertainty, first movers' difficulty to adapt to market changes
Types of Alliances
1. Contractual Alliances
2. Entry-based Alliances
3. Strategic Alliances
Why do acquisitions happen?
1. synergetic motives
2. hubristic motives
3. managerial motives
Pre-acquisition
overpayment
Post-acquisition
Failure to integrate
Inflation
A general and progressive increase in prices
delfation
a decrease in the general level of prices
appreciation of currency
a rise in the price of one currency relative to another
