WGU D080 Managing in a Global Business Environment

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14 terms hjon Worst Forms of Child Labour Convention - 1999 Convention (1999) that aimed to eliminate all practices of child slavery or those similar to slavery

• trade and transactions
• capital and investment movements
• the migration and movement of people
• the dissemination of knowledge

What four fundamental aspects of globalization were identified by the IMF in 2000?global warming, cross-boundary water and air pollution, and overfishing in the ocean What environmental challenges are linked with globalization?economic, cultural, and politicalWhat are the three main areas of globalization?CAGE analysis Culture, Administration, Geography, Economics How would you study the barriers to cross-border economic activity?The IMF helps maintain liquidity of global funding by providing a straight-forward method for nations to borrow and loan to each other through a mechanism called the special drawing right.What are the major functions of the IMF?The conditions put on the loan require the recipient country to have a policy of austerity. This policy, which usually results in a cut in funding for social programs, can have a significant effect on citizens who are living in poverty, according to critics of the IMF.Other criticisms of the IMF address a lack of representation by the global south and an overrepresentation by the United States.What are some criticisms of the IMF?

- three priorities: helping build sustainable economic

growth, investing in people, and building resilience to shocks and threats.

- two goals: end extreme poverty, improve the income of

the lowest 40% of citizens in each country.What are the priorities and goals of the World Bank?

• the hegemony or power imbalance in the leadership of

both organizations.

• enforced conditionality, or structural reforms causing

harm, not help to developing countries.

• the World Bank's support for privatization in general

and specifically in the health sector.

• not considering how funding projects will adversely

affect the environment.

• emerging markets, particularly China, frustrated with

their lack of influence in the World Bank.What are some criticisms of the World Bank?The World Trade Organization serves as trade moderator in the world. Governments determine how much and what to trade after voting on trade policies that all governments must follow. The World Trade Organization enforces rules and reviews each government's trade policies to evaluate for fairness and transparency.What is the purpose of the WTO?

• the required review of a nation's trade policies

compromises national sovereignty.

• WTO trade rules prohibit tariff protections.
• The most favored nation policy can give multinational

companies an unfair advantage.

• it has refused to address the impacts of free trade on

labor rights.

• Free trade is not equal across all industries. The United

States and the European Union both have high tariffs on agriculture. These tariffs on agriculture hurt developing countries where agricultural exports are their primary goods to trade.

• WTO requires consensus to pass a policy. Major trading

blocs like the EU and NAFTA can effectively prevent any plan from moving forward due to this policy.

• has been accused of ignoring environmental concerns.
• It protects developed countries more than developing

countries.What are some criticisms of the WTO?The World Trade Organization was formed after World War II to encourage international trade by creating a mechanism to negotiate trade agreements.Which organization was formed after World War II to encourage international commerce?The WTO was established to work towards decreasing tariff rates and protecting the trade of goods, services, and intellectual property.Which strategic network was established to work towards decreasing tariff rates and protecting commerce and intellectual property globally?

The IMF's purpose is to provide a way for countries to easily exchange money, provide financial help to its members, and supervise international economic policies.What is the purpose of the IMF?The World Bank is directly associated with development project.Which critical distinction should a developing country make when choosing between the World Bank and the International Monetary Fund (IMF) to improve the country's highways?Because of the voting power highly-developed countries have on World Bank policies Five highly developed countries combine to have 38% of the voting power for the World Bank.Why should the newly-elected leader of a developing country be careful when working with the World Bank to eliminate the nation's trade deficit?To receive help building international exchange capacity One of the functions of the WTO is to help developing countries build trade and international exchange capacity so they can have a presence in the international markets.Why should the newly-elected leader of a developing country use the World Trade Organization (WTO) to form favorable trade agreements?A country has an absolute advantage in those products that it has a productivity edge over other countries; it takes fewer resources to produce a product. A country has a comparative advantage when a good can be produced at a lower cost in terms of other goods.Absolute advantage compares the productivity of a worker between countries. Comparative advantage identifies the good for which the producer's absolute advantage is relatively larger or where the producer's absolute productivity disadvantage is relatively smaller.What is the difference between comparative advantage and absolute advantage?An absolute advantage is a term coined by Adam Smith and refers to the multiple things that a country can do more efficiently than other countries.A country produces goods more efficiently than all other countries in the same industry.Which type of advantage does this country have?

• Some parts of the economy may not be able to

compete with cheaper or better imports.

• Global demand may shift so there is no longer a

demand for the goods or services produced by a country.

• Relying on another country for vital resources makes a

country dependent on that country.What are some downsides to specializaton?

• Quotas restrict competition for domestic commodities,

which raises prices and reduces the selection.

• Quotas may also foster negative economic activities.

Import quotas may promote administrative corruption, especially in countries where import quotas are given to selected importers.Explain the impact of quotas

An important distinction between quotas and tariffs is that quotas do not increase costs to foreign producers whereas tariffs do. In the short run, a tariff will reduce the profits of foreign exporters of a good or service. A quota, however, raises the price, but not costs, of production and thus may increase profits.What is the difference between tariffs and quotas?specific limitations to trade, customs, administrative procedures, government participation, and technical barriers to trade.What are the five main types of trade barriers?A protective tariff is put into place to reduce the number of imports of a product that is produced domestically and to increase the cost of the imports to make the domestic product's price more appealing to consumers.Which type of tariff is put in place to specifically ensure that domestic industries are given an advantage?Since a free trade agreement involves revenue from trade, it must be approved by both houses of Congress, whereas a treaty only needs to be approved by the Senate.How are free trade agreements handled differently than treaties in the United States?Free trade can increase the wages and availability of jobs in some sectors but have the opposite effect in other sectors.What are the concerns on the use of labor in developing nations caused by free trade?steady decrease in tariff rates as well as served as a protector for the trade of goods, services, and intellectual property GATT eventually evolved into the WTO.How does GATT function to promote trade?

• the first involves core principles regarding

nondiscrimination

• the second involves allowable exceptions to these

principles.What two principles of behavior concerning international trade policies must GATT countries agree to?country-specific and product-specific promises. What are the two promises, or commitments, countries make under GATT?Trade agreements, because they include a revenue stream, must be passed by both the U.S. Senate and the House of Representatives.How is a trade agreement approved?technology and transportation, the lure for higher profits, the fall of the Berlin Wall, and financial liberalization.What four factors caused the rapid increase in FDI?