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Flashcards in Chapter 2 Deck (68):
1

Greenhouse Effect

turning of our atmosphere into a kind of greenhouse as a result of the addition of carbon dioxide and other greenhouse gasses

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global warming

a warming of the planet that will have disastrous effects on the planet

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Arab Springs

series of anti-government protests and uprisings in a number of Arab countries facilitated by new social media tools available to people in the region

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world trade

flow of goods and services among different countries- the value of all the exports and imports of the world's nations

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countertrade

type of trade in which goods are paid for with other items instead of with cash

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General Agreement on Tariffs and Trade (GATT)

international treaty to reduce import tax levels and trade restrictions

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World Trade Organization (WTO)

organization that replaced GATT; the WTO sets trade rules for its member nations and mediates disputes between nations

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World Bank

international lending institutions that seeks to reduce poverty and improve the lives of people by improving economies and promoting sustainable development

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International Monetary Fund (IMF)

international organization that seeks to ensure the stability of the international monetary exchange by controlling fluctuations in exchange rates

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foreign exchange rates (forex rate)

price of a nation's currency in terms of another currency

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balance of payments

statement of how much trade a country has going out compare to how much it has coming in; if a country is buying more than selling, it will have a negative balance of payments

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protectionism

policy adopted by a government to give domestic companies an advantage

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import quotas

limitations set by a government on the amount of a product allowed to enter a country

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embargo

quota completely prohibiting specified goods from entering/leaving a country

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tariffs

taxes on imported goods

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economic communities

groups of countries that band together to promote trade among themselves and to make it easier for member nations to compete elsewhere

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least developed countries (LDC's)

a country at the lowest stage of economic development

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gross domestic product (GDP)

total dollar value of goods and services produced by a nation within its borders in a year

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economic infrastructure

quality of a country's distribution, financial, and communications systems

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level of economic development

broader economic picture of a country

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standard of living

indicator of the average quality and quantity of goods and services consumed in a country

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developing countries

countries in which the economy is shifting its emphasis from agriculture to industry

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bottom of the pyramid (BOP)

collective name for the group of consumers throughout the world who live on less than $2 a day

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sachet

affordable one-use packages of cleaning products, fabric softeners, shampoo, etc., for sale to consumers in least developed and developing countries

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BRICS countries

Brazil, Russia, India, China, South Africa
-fastest growing and developing countries; with more than 3 billion people, 42% of the world population, and about 20% of the gross world product

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developed countries

country that boasts sophisticated marketing systems, strong private enterprise, and bountiful market potential for many goods and services

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Group of Seven (G7)

informal forum of the 7 most economically developed countries that meets annually to discuss major economic and political issues facing the international community; formerly G8 but Russia was excluded in 2014

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business cycle

overall patterns of change in the economy- including periods of prosperity, recession, depression, and recovery- that affect consumer and business purchasing power

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competitive intelligence (CI)

process of gathering and analyzing publicly available info about rivals

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discretionary income

portion of income people have left over after paying for necessities such as housing, utilities, food, and clothing

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product competition

when firms offering different products compete to satisfy the same consumer needs and wants

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broad competition

when firms offering similar goods/services compete on the basis of their brand's reputation or perceived benefits

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monopoly

market situation in which one firm, the only supplier of a particular product, is able to control the price, quality, and supply of that product

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oligopoly

market structure in which a relatively small number of sellers, each holding a substantial share of the market, compete in a market with many buyers

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monopolistic competition

market structure in which many firms, each having slightly different products, offer unique consumer benefits

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perfect competition

market structure in which many small sellers, all of whom offer similar products, are unable to have an impact on the quality, price or supply of a product

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drones (UAV's)

unmanned arial vehicles or flying robots controlled remotely using GPS tech

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patent

legal mechanism to prevent competitors from producing or selling an invention; aimed at reducing or eliminating competition in a market for a period of time

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nationalization

when a domestic government reimburses a foreign company (often not for full value) for its assets after taking over

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expropriation

when a domestic government seizes a foreign company's assets without any reimbursement

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local content rules

form of protectionism stipulating that a certain proportion of a product must consist of components supplied by industries in the host country or economic community

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US Generalized System of Preferences (GSP)

program to promote economic growth in developing countries by allowing duty-free entry of goods into the US

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demographics

statistics that measure observable aspects of a population, including size, age, gender, ethnic group, income, education, occupation, and family structure

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cultural values

society's deeply held beliefs about right and wrong ways to live

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collectivist cultures

cultures in which people subordinate their personal goals to those of a stable community

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individualist cultures

cultures in which people tend to attach more importance to personal goals than to those of the larger community

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social norms

specific rules dictating what is right or wrong, acceptable or unacceptable

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consumer ethnocentrism

consumers' feeling that products from their own country are superior or that it is to buy products produced in another country

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export merchants

intermediaries a firm uses to represent in it other countries

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licensing agreement

agreement in which one firm gives another firm the right to produce and market its product in a specific country or region in return for royalties

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franchising

form of licensing involving the right to adapt an entire system of doing business

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strategic alliance

relationship developed between a firm seeking a deeper commitment to a foreign market and a domestic firm in the target country

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joint venture

strategic alliance in which a new entity owned by two or more firms allows the partners to pool their resources for common goals

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straight extension strategy

product strategy in which a firm offers the same product in both domestic and foreign markets

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product adaptation strategy

product strategy in which a firm offers a similar but modified product in foreign markets

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product invention strategy

product strategy in which a firm develops a new product for foreign markets

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backward invention

product strategy in which a firm develops a less advanced product to serve the needs of people living in countries without electricity or other elements of a developed infrastructure

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free trade zones

designated areas where foreign companies can warehouse goods without paying taxes or customs duties until they move the goods into the marketplace

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gray market goods

items manufactured outside a country and then imported without the consent of the trademark holder

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dumping

a company tries to get a toehold in a foreign market by pricing its products lower than it offers them at homes

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ethical relativism

suggests that what is ethical in one culture is not necessarily the same as in another culture

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business ethics

basic values that guide a firm's behavior

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code of ethics

written standards of behavior to which everyone in the organization must subscribe

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bribery

when someone voluntarily offers payment to get an illegal advantage

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extortion

when someone in authority extracts payment under duress

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green customers

those consumers who are most likely to actively look for and buy products that are eco-friendly

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fair trade suppliers

companies that pledge to pay a fair price to producers in developing countries, to ensure that the workers who produce the goods receive a fair wage, and to ensure that these manufacturers rely where possible on environmentally sustainable production practices

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locavorism

trend for shoppers to actively look for products that come from farms within 50-100 miles from where they live