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GMS400
Midterm Study
| Term | Definition |
|---|---|
| Culture | A set of beliefs and values about what is desirable and undesirable in a community of people, and a set of formal and informal practices that support the values. |
| Beliefs | Convictions that we generally hold to be true, usually without actual proof or evidence |
| Values | Things that we deem important and live by. They can include concepts like: equality, honesty, education, effort, perseverance, loyalty, faithfulness, etc. |
| Common Cultural Heritage | To share a common culture people generally are from the same geographic area or country, they have a shared history, they speak the same language, and often they have the same religion |
| Power Distance | Reflects the extent to which a community accepts and endorses authority, power differences, and differences in status privileges. |
| Uncertainty Avoidance | The tolerance for uncertainty in coping with issues like new technologies, challenges to religious beliefs, rules, and rituals. |
| Individualism-Collectivism | This is a dimension that assesses whether an individual's first priority is to him/herself, or whether it is to his/her social group. |
| Masculinity-Femininity | The assessment of whether a culture prefers masculine tendencies (aggressive, competitive, firm) versus the traditional female role of being nurturing, supportive and flexible. |
| Gender Egalitarianism | The degree to which an organization or a society minimizes gender role differences while promoting gender equality. |
| Monochronic Cultures | Cultures that like to do just one thing at a time. Everything must be done according to schedule. They do not value interruptions. |
| Polychronic Cultures | Cultures that like to multiple things at the same time. Time is flexible and there is no rush because tie flows on. |
| United Nations | A forum all nations of the world (192) members. Its main purposes are to keep peace throughout the world; develop friendly relations among nations; help nations work together to improve the lives of poor people; harmonize actions to achieve goals |
| UN Security Council | Charged with maintaining peace and security among countries. Has the power to make binding decisions that member governments must carry out. |
| UN Organizations and Agencies | IAEA: International Atomic Energy Agency, UNESCO: United Nations educational, scientific, and cultural organization, Food and Agriculture organization, World Bank, World Health Organization |
| UN Sanctions | Although the UN cannot make orders, it can enforce rules through sanctions. The basis of sanctions is derived from International Law that states enforcement measure must not use armed force |
| Multilateral Development Banks (IFI) - International Financial Institutions | An institution, created by a group of countries, that provides financing and professional advising for the purpose of development. |
| IMF International Monetary Fund | Agency of the UN that monitors the world's economies, lend to members in need and provides technical assistance. |
| The Washington Consensus | A conspiracy theory that believe bis businesses run the US government which in turn controls the IMF and World Bank. "Big American companies control the policy and fate of poor countries" |
| World Trade Organization | The only international organization dealing with trade between nations on a global scale. It sets rules for liberalized and fair trade. It's also a form for governments to negotiate trades and settle disputes. |
| WTO: The Doha Round | Its target was to address the needs of developing countries. |
| North Atlantic Treaty Organization [NATO] | A political and military alliance to protect the security of its members, almost exclusively in Western Europe. It is also entitled to carry out crisis management by the military if disputes get aggressive. |
| Governance of a Nation | Nations are governed by a continuously changing succession of people who have different roles for creating and enforcing laws. Sometimes the rulers are hereditary, some come from a small elide political party, and some are freely elected. |
| Absolute Monarchy | A form of government where the monarch rules unhindered. |
| Constitutional Monarchy | A system of government in which a monarch is guided by a constitution whereby his/her rights, duties and responsibilities are spelled out on written law or by custom. |
| Democracy | A form of government in which the supreme power is retained by the people, which is usually exercised indirectly through a system of representation and delegated authority periodically renewed |
| Totalitarian Government | A government that seeks to subordinate the individual to the state by controlling not only all political and economic matters, but also the attitudes, values, and believes of its population. |
| Dictatorship | A form of government in which a ruler or small clique wield absolute power (not reattributed by a constitution or laws) |
| Theocracy | A form of government in which a Deity is recognized as the supreme civil ruler, but the Deity's laws are interpreted by sacred authorities. (A government subject to religious authority) |
| Parliamentary Government | A government in which members of an executive branch are nominated to their positions by a legislature or parliament, and are directly responsible to it. |
| Branches of Government | 1. Legislative 2. Executive 3. Judicial |
| Capitalism | An economic system that emphasizes a free market in which companies live by the profit motive. Prices production and distributions of goods are determined by competition in a free market. |
| Socialism | An economic system in which property is held in common and not individually, and economic relationships are governed by a political hierarchy. |
| NPT Nuclear Non Proliferation Treaty | UN Treaty that members must sing. It was design to share peaceful nuclear technology and prohibit sharing of nuclear weapons. NPT is enforced by the IAEA. |
| Hermit Kingdom | The term westerners gave to North Korea due to their isolation and hostility towards foreigners. |
| 38th Parallel | The border between North and South Korea. It's a no man's land with land mines and barbed wire on both sides. |
| Kim Jong-Un's Goals | Recognitions by the USA that NK is a sovereign country. A stronger economy: needs sanctions to be lifted. Potentially reunite with SK. |
| Caliphate | An Islamic state that is led by a caliph, who is a political and religious leader who is a successor to the islamic prophet Muhammad. His power and authority is absolute. |
| ISIS - Islamic State in Iraq and Syria | Revolutionary (sunni) group who has been fighting against the Syrian government. They have established a caliphate across Iraq and Syria and have forced minorities out of their homes. |
| Sykes Picot Treaty | The UK and French Empires secretly to divide up the middle east amongst themselves. Theses border between the French and British later became the borders between Iraq, Syria and Jordan. It then grouped different ethic and religious groups together |
| GDP Gross Domestic Product | The value in current market prices of goods and services produced by residents of a county and investments into the country in one year. It is equal to the sum of personal expenditures, investments, government expenditures and total exports minus imports. |
| PPP Purchasing Power Parity | Adjusts GDP by the cost of living in a country for realistic comparisons. PPP = GDP/Cost of Living |
| Cost of Living | Measurement of the cost of a common basket of goods in different countries. |
| Hard Currency | Can be exchanged anywhere in the world. (USD, Yen, Euro) The exchange rate established by open market trading |
| Soft Currency | Can only be exchanged in the domestic market with approval from the central gov't or a gov't bank. (Chinese Yuan) |
| Reserve Currency | a currency that is held by many countries as their foreign exchange reserves. Us dollar is the world's primary reserve currency, then Euro, then pound, then Yen. This allows USA to borrow cheaply, thus spending more than it earns |
| US Dollar | Gold, crude oil and diamonds are priced in US dollars. US imports are 50% larger than exports. Their national dept of 19 trillion keeps growing and will lead to devaluation of dollar in the long run. |
| Bonds | A loan an investor makes to the bonds' issuer. The investor receives regular interest payments on the loan until the bond matures or at which point the issuer repays the principal. |
| China's effect on the US | China's uses its vast amount of hard currency from exports to invest in US treasury bonds therefore making them the largest foreign investor in US bonds. This supports the US $, if China dumps US bonds, then the US $ will plummet. |
| Chinese Currency | Chinese currency was tied to US dollar for a brief period of time. China had a huge amount of foreign currency and changed their exchange rate 2.1% thus undervaluing the yuan. Now china is buying less and slowing down global trade. |
| FDI Foreign Direct Investment | An investment by foreign companies. Reasons: technology transfer to domestic workforce, employment for citizens, corporate taxes, exports, import substitution. |
| BRICs | A term used in economics to refer to the combinations of Brazil, Russia, India, China and South Africa. |
| Canadian Dollar | The canadian dollar has fallen due to low oil prices, low interest rates relative to US rising interest rates, people want more US rather than Cdn. This is good for Cdn exports bad for Cdn consumers. |
| Country Risk Analysis | Perfomring Due Diligence on a country before entering the market |
| Banks and Country Risk Analysis | Banks lend to companies for projects and investments all over the world thus they need to establish the risk premium for each country and determine their maximum exposure |
| Political Risk Analysis | To identify in advance existing and potential risk situations primarily political in nature in order to reduce the risk of financial loss for the firm. (war, coup d'etat, repression, rioting, strikes) |
| Economic Risk Analysis | Looks at the GDP of the country, seeing an ideal growth of 2%. Looks at PPP, balance of payments, soft vs. hard currency, currency stability, inflation rate and corporate and personal tax rates. |
| Indirect measures of Economic Development | Measuring quality of life: literacy rates, infant mortality rates, life expectancy, caloric consumptions, education spending, number of people per doctor |
| Operational Risk | Risks to employees or property as a result of being physically located in the country (natural disasters, hostage-taking, religious extremists, restrictions on women, etc.) |
| Tariff | Taxes on imported goods, traditionally used to protect local industries (also known as custom or import duties) |
| Most Favoured Nation Status | WTO regulations states that a country must set tariffs for every country the same as for the best country rate or the most favoured nation |
| Non-Tariff Barriers | Government laws, regulations, policies or practices that protect domestic companies from foreign competition. |
| Examples of non-tariff barriers | Quotas, import license requirements, product standards, labeling requirements, environmental regulations, local content requirements or government purchasing policies, trade wards, sanctions or embargo |
| Regional Trading Blocs | A group of counties that are legally recognized by the WTO, and do not affect the most favourited nation tariff requirements. These groups of countries protect themselves from imports and non-members. |
| Common Market | No internal tariffs, free movement of labour and banking, and common tariffs for exports from outside countries. (EU) |
| Customs Union | No internal tariffcs, common tariffs for imports from outside the union, but no immigration, capital, or labour agreements. (Mercosur) |
| Free Trade Area | No internal tariffs, but each member has its own tariff rates for imports from non-members. (NAFTA) |
| EU European Union | 27 members in Europe. They usually meet 4 times a year in Brussels Belgium. The EU has a parliament located in Strasbourg France and elects members for the European Parliament. The EU has it's own common currency, the euro. |
| North American Free Trade Agreement NAFTA | Composed of USA, Canada and Mexico. It states that all goods may pass by borders with no duties. Free trade exceptions have been made for transportation, energy, education and professional services. |
| Southern Market (MERCOSUR) | Customs Union agreement among a few countries in south america. Its headquarters are in Montevideo Uruguay and encompasses 190 million people with a 400B economy. |
| Association of Southeast Asian Nations (ASEAN) | Beginnings of free trade agreements among 10 asian countries. |
| Other regional trading blocs | New Zealand-Australia Free Trade Agreement, Mahgreb Common Market (MCM): trade agreement among Arab nations in northwest Africa, Caribbean Common Market (CARICOM): english-speaking islands in the Caribbean; common external tariffs, FTAA - didn't happen |
Created by:
13rallie
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