BEC MCQ 6.3 Flashcards Preview

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Flashcards in BEC MCQ 6.3 Deck (17)
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1
Q
Globalization
A
Is described as a distribution of industrial and service activities across a increasing number of nations.
It is measured by world trade as a percentage of GDP
2
Q
Economic systems
A
Centrally planned Economies, market economies, Conglomerates.
3
Q
IMF
A
Do not regulate currency values
4
Q
Global Economic balance of power
A
A distribution of power and influence that ensures that no one nation or group of nations will dominate or interfere with the activities of others
5
Q
Three basic Risk preferences
A
Risk indifferent- Increase int he level of risk does not result in an increase in the managements required rate of return
Risk-averse- Increase in the level of risk results in an increase in management's required rate of return
Risk seeing behavior- Increase in level of risk results in the decrease in managements required rate of return
6
Q
Diversifiable risk(Unique)
A
Non market, Unsystamatic or firm specific risk
Non diversable risk- Market or systematic risk
7
Q
NAFTA offers trading partners operating its boundaries reductions in tariffs on products in exchange for compliance with limits on imported labor and materials
A
are known as sourcing requirement
8
Q
Foreign trade zone
A
contemplates a physical location in which tariffs are waived on imported products until they leave a zone.
9
Q
Value added tax
A
is an incremental tax, not a reduction in tarriffs
10
Q
The concentration of power in one country
A
is referred to as unipolar.
11
Q
Unilateral
A
The action taken by single nation acting on its own is referred to as unilateral . The distribution of power is a separate issue
12
Q
Multilateral
A
refers to power that is not only distributed but shared cooperatively among nation
13
Q
Bric Nations
A
Brazil, Russia, India and China whose overall economic activity represents an increasing components of world GDP and gradual shift in economic balance of power
14
Q
Global Sourcing complication
A
Global sourcing is the use of world wide supply chain. The reduced production in US factories as a result of natural disaster in Japan is an example of the complications that come from global sourcing
15
Q
Transaction risk
A
Transaction risk is the risk that the settlement of a specific transaction in a foreign currency will result in transactional loss
16
Q
Economic Risk
A
Is the risk that the fluctuations in the exchange rate could have a negative impact on a company that either consistently sells to foreign customers or consistently buys from foreign vendors
17
Q
Shift in the balance of economic power
A
releate to the shared and changing ability of countries to impact the world wide economy