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INTB 200 FULL ACTUAL MIDTERM EXAM 2025 VERIFIED WITH COMPLETE SOLUTIONS
Globalization The shift towards a more integrated and interdependent world economy Globalization of Markets The merging of historically distinct and separate national markets into one huge marketplace World Trade Organization (WTO) Polices the world trading system, promotes lower barriers to trade and investment International Monetary Fund (IMF) Maintains order in the international monetary system, lends money only in times of crisis World Bank Promotes economic development via low interest loans for infrastructure projects Foreign Direct Investment (FDI) Occurs when a firm invests resources in business activities outside its home country
Political System The system of government in a nation Collectivism Stresses the primacy of collective goals over individual goals, Totalitarian Communism Socialism can only be achieved through violent revolution and totalitarian dictatorship Social Democrats Socialism is achieved through democratic means (ex. Sweden, Bernie Sanders) Individualism Philosophy that an individual should have freedom in his own economic and political pursuits Democracy Political system in which government is by the people, exercised either directly or through elected representatives
Command Economies Government plans the goods and services that a country produces, the quantity that is produced, and the prices as which they are sold (everything state owned) Greenfield Investments Normally 100% ownership of a foreign company, usually in developing countries Exporting Producing goods at home and then shipping them to the receiving country for sale (direct and indirect) Licensing Granting a foreign entity the right to produce and sell the firm's product in return for a royalty fee on every unit that the foreign entity sells Radical View of FDI The MNE is an instrument of imperialist domination and a tool for exploiting host countries to the exclusive benefit of their capitalist-imperialist home countries Free Market View of FDI International production should be distributed among countries according to the theory of comparative advantage
Mercantilism It is in a country's best interest to maintain a trade surplus (export more than import), trade is a zero sum game , government intervention Absolute Advantage Country has this in the production of a product when it is more efficient than any other country in producing it Comparative Advantage Countries should specialize in the production of those goods they produce most efficiently and buy goods that they produce less efficiently from other countries (positive sum game) Heckscher-Ohlin Theory Comparative advantage arises from difference in national factor endowment New Trade Theory Countries may specialize in the production and export of particular products because in certain industries, the world market can only support a limited number of firms Porter's Diamond of Competitive Advantage
Political Union Involves a central political apparatus that coordinates the economic, social, and foreign policy of member states (U.S.) Trade diversion Low cost producers within the free trade area replace the high cost domestic producers Trade Creation High cost producers within the free trade area replace lower cost external suppliers European Council Ultimate controlling authority within EU European Commission Proposes EU legislation, implements it, and monitors compliance with EU laws European Parliament Debates legislation proposed by commission and forwarded to it by council
Court of Justice Supreme appeals court for the EU Maastricht Treaty Committed the EU to adopt a single currency (Euro) Mixed Economies Certain sectors of the economy are left to private ownership and free market mechanisms while other sectors have significant state ownership and government planning Common Law Based on tradition, precedent, and custom (Flexible) Civic Law Based on a detailed set of laws organized into codes (less need for lawyers) Theocratic Law Law is based on religious teachings (Sharia)
The routine conventions of everyday life Mores Norms that are seen as central to the functioning of society and to its social life Social Mobility The extent to which individuals can move out of the strata into which they are born Caste System Closed system of stratification in which social position is determined by the family into which the person is born (India) Class System Form of open social stratification, position can be changed through achievement or luck Christianity World's largest religion, Protestant work ethic Power Distance How a society deals with the fact that people are unequal in physical and intellectual capabilities
Uncertainty Avoidance The relationship between the individual and his fellows Individualism vs. Collectivism The extent to which different cultures socialize their members into accepting ambiguous situations and tolerating ambiguity Types of political systems communism, capitalism, socialism Communism Marx, communism is a classless society Centralized planning Government owns the means of production Government decides what is to be produced Government decides the distribution of the product Capitalism market economy Businesses are privately owned and operated for profit
Nationalization government takes private property and moves it to the public sector Expropriation the government pays for the private property it has seized Confiscation government does not pay for the private property it has seized How to protect your employees stability, hostilities and terrorism Stability what changes will be made if the government changes Policy changes, economic changes Hostilities traditional hostilities around the world
Terrorism unlawful acts of violence to achieve a variety of objectives Cybercrime any illegal internet activity that takes place in electronic networks Political risk changes in the political environment that are going to adversely affect the value of a firm's business activities. Ownership risk, operating risk and transfer risk Transfer risk government interferes with the firm's ability to transfer funds into or out of the country World Trade Organization (WTO) Limits actions governments take in their trade regulations Rules-based Member-driven 164 members Non-government organization GATT
National treatment when you bring a product in, it can not be treated differently from domestic products Progressive liberalization lower visible and invisible trade barriers such as tariffs and red tape Promoting fair competition discourage subsidies, countervailing duties (dumping) Legal Systems rules that regulate behavior, along with the processes along which the laws of a country are enforced, and through which redress (satisfaction) for grievances is obtained Rule-of-Law business people make certain that the country is governed by the legal system that is in place Common Law Judge is a neutral referee ruling on motions by the opposing parties, decisions based on the cumulative knowledge of judges
Civil Law Decisions are already in the books Judge decides what is or is not permissible in court, determine the scope of evidence Bureaucratic Law totalitarian, used in dictatorships Law is whatever the bureaucrats decide Contracts can be made or broken on a whim No recourse if you lose a case No consistency, predictability, or appeal Religious/Theocratic Law based on the tenets of a country's religion Tribal/Traditional Law have their own law, government only steps in during extreme cases International Law COGSA, CISG, WTO
This body plans the economic and social work of UN agencies. It also focuses on sustainable development, fighting poverty, and human rights. The International Court of Justice This body promotes international law, settles legal disputes between states, and advises legal questions. Masculinity vs. Femininity The relationship between gender and work roles Foreign Corrupt Practices Act Outlaws the practice of paying bribes to foreign government officials in order to gain business Convention on Combating Bribery of Foreign Public Officials in International Business Transactions Obliges member states to make the bribery of foreign public officials a criminal offense Friedman Doctrine The only social responsibility of business is to increase profits, so long as the company stays within the rules of law
Cultural Relativism Ethics are culturally determined and firms should adopt the ethics of the cultures in which they operate Righteous Moralist A multinational's home country standards of ethics should be followed in foreign countries Naive Immorlaist If a manager of a multinational sees that firms from other nations are not following ethical norms in a hist nation, that manager should not either Utilitarian Ethics The moral worth of actions or practices is determined by their consequences (fails to consider justice) John Stuart Mills Kantian Ethics People should be treated as ends and never purely as means to the ends of others (people need to be respected) Immanual Kant Veil of Ignorance John Rawls, everyone is imagined to be ignorant of all his or her particular characteristics
