WGU C211 Global Economics for Managers Study Guide

WGU C211 Global Economics for Managers Study Guide *post 9/22/22 update* Leave the first rating Students also studied Terms in this set (143) Social SciencesPolitical Science Save

C211 WGU

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C211 WGU

235 terms damaris_diez_stevens Preview Second Attempt Competency 1 Quiz...28 terms MacKenzie_Clinton36 Preview Compe 11 terms mel Practice questions for this set Learn1 / 7Study using Learn the willingness of a government to let the demand and supply conditions determine exchange rates Cognitive pillarthe internalized, taken-for-granted values and beliefs that guide individual and firm behavior Formal institutionsinclude laws, regulations, and rules.Choose an answer 1Cognitive pillar2Floating (or flexible) exchange rate policy 3Communist totalitarianism4Institution-based view Don't know?

Informal institutionsinclude norms, cultures, and ethics.Institutional frameworkformal and informal institutions that govern individual and firm behavior Institution-based viewrequires firms to constantly monitor, decode, and adapt to the changing rules of the game to survive and prosper.Institutionspopularly known as "the rules of the game." Institutional transitionsfundamental and comprehensive changes introduced to the formal and informal rules that affect firms as players.Normative pillarhow the values, beliefs, and actions of other relevant players—collectively known as norms —influence the behavior of local individuals and firms.Regulatory pillaris the coercive power of governments.The key functions of institutions are to...reduce uncertainty, curtail transaction costs, and combat opportunism.Opportunismdefined as self-interest seeking.Transaction costscosts associated with economic transactions—or more broadly, costs of doing business.Communist totalitarianismcenters on a communist party.Democracypolitical system in which citizens elect representatives to govern the country on their behalf Political riskrisk associated with political changes that may negatively impact domestic and foreign firms Right-wing totalitarianismcharacterized by its intense hatred of communism.Theocratic totalitarianismthe monopolization of political power in the hands of one religious party or group Totalitarianism (dictatorship)a political system in which one person or party exercises absolute political control over the population Tribal totalitarianismone tribe or ethnic group (which may or may not be the majority of the population) monopolizing political power and oppressing other tribes or ethnic groups.Political Riskrisk associated with political changes that may negatively impact domestic and foreign firms.Civil law uses...comprehensive statutes and codes as a primary means to form legal judgments Common law is...shaped by precedents and traditions from previous judicial decisions

Copyrightsexclusive legal rights of authors and publishers to publish and disseminate their work Intellectual propertyspecifically refers to intangible property that results from intellectual activity (such as books, videos, and websites) Intellectual property rights (IPRs)rights associated with the ownership of intellectual property. IPRs primarily include rights associated with (1) patents, (2) copyrights, and (3) trademarks Patentslegal rights awarded by government authorities to inventors of new products or processes, who are given exclusive rights to derive income from such inventions through activities such as manufacturing, licensing, or selling.Piracyunauthorized use of IPRs is widespread, ranging from unauthorized sharing of music files to deliberate counterfeiting of branded products Property rightsThe legal rights to use an economic property (resource) and to derive income and benefits from it.Theocratic lawA legal system based on religious teachings.Trademarksexclusive legal rights of firms to use specific names, brands, and designs to differentiate their products from others.market economysystem characterized by the "invisible hand" of market forces: government takes a hands-off approach known as the laissez faire.mixed economiesmixed emphasis on market versus command forces.command economygovernment ownership and control of all means of production State-owned enterprises (SOEs)firms that are at least 10% owned by the state Sovereign wealth fund (SWF)is a state owned investment fund Market transition debatepertains to how to make the transitions work in a most effective and least disruptive way.Moral hazardrecklessness when people and organizations (including firms and governments) do not have to face the full consequences of their actions.Path dependencythe present choices of countries (as well as firms and individuals) are constrained by the choices made previously Washington Consensusis a view centered on the unquestioned belief in the superiority of private ownership over state ownership in economic policymaking that is often

spearheaded by two Washington-based international organizations: the

International Monetary Fund and the World Bank.

Balance of tradethe aggregation of buying (importing) and selling (exporting) by both sides leads to the country-level trade surplus or deficit.Exportselling abroad.Importingbuying from abroad.Merchandisetransactions involving tangible goods.Trade deficitan economic condition in which a nation imports more than it exports.Servicetransactions involving intangibles.Trade surplusan economic condition in which a nation exports more than it imports.Absolute advantageinvolves being more efficient than anyone else in the production of any good or service The 3 Classical trade theoriesmercantilism, absolute advantage, and comparative advantage Comparative advantagethe relative (not absolute) advantage in one economic activity that one nation enjoys in comparison with other nations.Factor endowmentsextent to which different countries possess various factors such as labor, land, and technology Factor endowment theory (or Heckscher-Ohlin theory) is the proposition that nations will develop comparative advantage based on their locally abundant factors First-mover advantagesadvantages that first entrants enjoy and do not share with late entrants Free tradeidea that free market forces should determine how much to trade with little (or no) government intervention MercantilismClassical trade theory that viewed international trade as a zero-sum game The 3 modern trade theoriesproduct life cycle, strategic trade, and national competitive advantage Opportunity costthe cost of pursuing one activity at the expense of another activity Product life cycle theoryan economic theory that accounts for changes in the patterns of trade over time Protectionismidea that governments should actively protect domestic industries from imports and vigorously promote exports Resource mobilitythe assumption that a resource removed from one industry can be moved to another