Assignment:
A.
Terms:
1. Absolute advantage
2. Acquired advantage
3. Comparative advantage
4. Country-similarity theory
5. Factor-mobility theory
6. Mercantilism
7. Natural advantage
8. Neomercantilism
9. Product life cycle
10. Theory of country size
11. Trade deficit (unfavorable balance of trade)
12. Trade surplus (favorable balance of trade)
Questions:
1. What are the theories of mercantilism and neomercantilism? How do favorable and unfavorable balances of trade apply to international business?
2. What is the international Product Life Cycle (PLC) Theory? Discuss the four stages of the international product life cycle.
3. What is the difference between the free trade theories of absolute advantage (including natural and acquired advantages) and comparative advantage? How can free trade improve global efficiency?
B.
Terms:
1. Dumping
2. Embargo
3. Essential-industry argument
4. Export tariff
5. Import (or export) license
6. Import tariff
7. Industrialization argument
8. Infant-industry argument
9. Protectionism
10. Quota
11. Subsidies
12. Tariff (duty)
13. Transit tariff
Questions:
1. Why do developing countries sometimes impose import restrictions to increase their levels of industrialization?
2. Name and briefly discuss the four noneconomic rationales for governmental intervention in the free movement of trade.
3. What is a tariff? Describe and compare the different types of tariffs (duties).
C.
Terms:
1. Commodities
2. Dynamic effect
3. Economic integration
4. Common market
5. Customs union
6. Economies of scale
7. European Union
8. Free trade area (FTA)
9. Most-favored-nation (MFN)
10. North American Free Trade Agreement (NAFTA)
11. Static effect
12. Trade creation
13. Trade diversion
14. World Trade Organization (WTO)
15. United Nations
Questions:
1. Describe the different types of regional economic integration and give an example of each type.
2. Explain the static effects and dynamic effects of economic integration. What is the difference between trade creation and trade diversion resulting from economic integration?
3. Explain the roles of the World Trade Organization and the United Nations in international trade.
D.
Terms:
1. Black market
2. European Central Bank
3. Federal Reserve System
4. Floating arrangement
5. Fundamental forecasting
6. Hard currency
7. International Monetary Fund (IMF)
8. Multiple-exchange rate system
9. Par value
10. Purchasing Power parity
11. Special drawing right
12. Technical forecasting
Questions:
1. What is the International Monetary Fund (IMF)? What are its objectives? What occurs when a country joins the IMF today?
2. What methods are used by managers to forecast exchange rates? What are the main factors that influence exchange rates?
3. How do exchange rate changes affect a company's marketing, production, and financial decisions? What predictors should a manager monitor to forecast exchange rate changes?
E.
Terms:
1. Code of conduct
2. Deontological approach
3. Extraterritoriality
4. Foreign Corrupt Practices Act (FCPA)
5. Normativism
6. Relativism
7. Sustainability
8. Teleological approach
9. Utilitarianism
Questions:
1. What is the difference between relativism and normativism? How do these concepts relate to ethical behavior in international business?
2. What is the Foreign Corrupt Practices Act? How has this law affected ethical behavior among international businesses?
3. What motivations do companies have to act responsibly? How can codes of conduct help firms to act ethically?