D080 Module 1 Questions and Answers Graded A

globalization ✔✔process by which people and goods (products, technology, information, ideas, job opportunities) move across boarders regulate global economic environment ✔✔International Monetary Fund, World Bank, World ...

globalization ✔✔process by which people and goods (products, technology, information, ideas, job opportunities) move across boarders regulate global economic environment ✔✔International Monetary Fund, World Bank, World Trade Organization globalization drivers ✔✔economics, transportation, international cooperation fundamental aspects of globalization ✔✔trade and transactions, capital and investment movements, migration and movement of people, the dissemination of knowledge areas of globalization ✔✔economy, politics, culture cultural globalization ✔✔transmission of ideas, meanings, values around the world - extends and intensifies social relations (formation of shared norms and knowledge with which people associate their individual and collective cultural identity)World Trade organization ✔✔provide framework for negotiation and formalizing trade agreements and a spite resolution process International Bank for Reconstruction and Development (The World Bank) ✔✔aid in economics development and cooperation financial instrument ✔✔a monetary contract between parties stages of going global ✔✔market entry, product specialization, value chain disaggregation, value chain reengineering, creation of new markets market entry ✔✔enter new countries using models similar to ones deployed in home markets product specialization ✔✔companies transfer production process of a particular product to a single low cost location and export the goods to different markets value chain disaggregation ✔✔companies separate the production process and focus on completing each activity in the most advantageous locationvalue chain reengineering ✔✔companies seek to increase cost savings by rejigging their processes to suit local market conditions (lower cost labor for capital) creation of new markets ✔✔focus = market expansion//company able to lower sticker prices and to expand demand industry globalization drivers ✔✔underlie conditions in each industry and create potential for industry to become more global market, cost, competition, government opportunities for scale ✔✔cost advantages due to an increase in the amount of output and decrease in cost per unit market ✔✔opportunity for scale, convergence of needs cost ✔✔economies of scale and scope, exploiting cost of factors of productioncompetition ✔✔new markets, increased levels of trade government ✔✔favorable policies, support for industry economies of scale ✔✔savings in costs increased by levels of production scope ✔✔efficient in variety Benefits globalization ✔✔more products available to reach more people, growth in GDP, more power to individuals MNC ✔✔multinational corporation MNC benefits globalization ✔✔unsaturated markets, low labor costs, less expensive natural resources (up revenue or lower cost structure) MNC challenges globalization ✔✔ethical business practices, organizational structure, public relations, leadership, laws and regulationsCAGE analysis ✔✔cultural, administrative/political, geographic, economic - barriers to crossboarder economic activity Gini coefficient ✔✔measures the inequality among values of a frequency distribution such as levels of income Happy Planet Index ✔✔measures how well nations are doing at achieving long, happy, sustainable lives Gross Domestic Product (GDP) ✔✔the total value of goods and services provided in a country in a 1 year period Gross National Product (GNP) ✔✔the total value of goods and services provided by a country both inside and outside of its boarders in a 1 year period Economic Growth ✔✔a percentage change in real GDP or real GNPIndustrialized Nations ✔✔economically advanced countries - healthy climate for private business (EX: Japan) Least Developed Countries (LDCs) ✔✔countries with extensive poverty - lack strong government and financial/economic systems ( EX: Uganda) Developing nations ✔✔countries that exhibit rising levels of education, technology, and per capita incomes - making transition from economies based on agriculture to industrialized economies (Ex: Costa Rica) Developing Economic System ✔✔what should the country produce/how will the country produce it/who will get the final product traditional economies ✔✔centered around a family (guided by tradition), hunter/gather or nomadic societies, rely on bartering, no surplus, economy evolves to some form of currency advantages traditional economy ✔✔no friction between members, all members understand position in society, sustainabledisadvantages traditional economy ✔✔at mercy of climate, lower standard of living, vulnerable to more efficient market command economy ✔✔economic effort devoted to goals passed down from a ruler or ruling class - resources/businesses owned by government command economy features ✔✔collective/state ownership of capital, state determines inputs and outputs, labor is allocated according to state plans, private ownership is not possible, prices are regulated by state, goods are rationed advantages to command economy ✔✔organizations mobilize large amounts of resources (large projects easily undertaken), economy transformed by leaders vision disadvantages command economy ✔✔neglect societies needs, rationing necessary, rules> innovation, shadow economies, economy is less flexible market economy ✔✔Economic decisions are made by individuals or the open market.characteristics of a market economy ✔✔goods/services privately owned, competition keeps prices low, relies on efficient market, government interference is at a minimum advantages market economy ✔✔able to buy need/want, production methods are efficient, innovation is rewarded disadvantages market economy ✔✔those who can't compete at a disadvantage, not all can reach full potential, divide between privileged and underprivileged mixed economies ✔✔protects private property, supply/demand laws, gov protect people and market freedoms of mixed economies ✔✔to possess means of production, to travel, buy/sell, hire/fire, organize, communicate, protest peacefully underground economies ✔✔economic transactions that are illegal Legal systems ✔✔common, civil, religiousCivil law ✔✔detailed set of laws that constitute a code and focuses on how the law is applied to the facts common law ✔✔based on traditions and precedence - judges interpret the law and judicial rulings set precedent religious law (theocratic law) ✔✔based on religious guidelines - moral legal system