1) 1/3 - Of all world trade agreements are organized as trading blocs
2) Adaptation - Necessary for products that require adjustments in order to meet local market demand
3) ANCOM - Andean Common Market
4) Arbitrage - Buying a commodity when its price is low and then reselling it after prices rise in order
to make a profit
5) Capacity - Total amount of products that can be produced by the entire operation in a given
amount of time
6) CARICOM - Caribbean Community and Common Market
7) Central Banks and Governments - Who are the primary guardians of national currencies and
usually responsible for setting monetary policy and exchange rate policy?
8) Commercial Banks and Investments Banks - Who are generally the market makers on the
foreign echange?
9) Common Market - Includes all of the elements of a Customs Union and freedom of movement of
the four factors of production
10) Common Market - It includes all of the elements of a customs union, and freedom ofmovement
of the four factors of production: goods, services capital and labor
11) Continuous Improvement - Sometimes referred to as Kaizen
12) Convertible Currencies - Currencies that can easily be exchanged for other currencies
13) Corporations - Who uses the FX market to facilitate international business activites?
14) Cost variables located with site selection - Distribution channel; energy, tax, labor, and raw-
marterial costs
15) Cross Rates - Have to be calculated when parties are conducting a trade in currencies other than USD
16) Currency Board - Monetary authority for a country/operates like a central bank
17) Custom Union - All barriers of trade among members are removed, and a common external
trade policy is adopted
18) Custom Union - Mercosur
19) Customs Delays - Bureaucratic formalities; slow down imported product from entering the
domestic market
20) Customs Delays - establishing beaurocratic formalities that slow down the ability for the
imported product from abroad to enter the domestic market
21) Devaluations - Deliberate downward adjustment in the official exchange rate
22) Direct Quotation - American: value of foreign currency in domestic currency
23) Economic Union - an agreement wherein nations remove all barriers to trade and the movement
of labor and capital and erect a common trade policy against nonmembers
24) Economic Union - European Union
25) Epanding into the global marketplace - Not an easy task or a "right" decision for the company
26) Exchange Rate Mechanism (ERM) - Formed the initial steps for the creation of a single
European currency
27) exchange rates freely float and change according to supply and demand - Describe a
floating exchange rate system
28) Export management Companies (EMC) - Independent businesses that liaison between the
parent company and the customer
29) Export Trading Company - Transact Commercial, Financial activities to facilitate exports
by unaffiliated persons
30) Exporting - Sending of goods abroad for trade or sale
31) Facilitator - Help manage a process of information exchange
32) Facilities Location - Key aspect: proximity of site to organization's largest customer base
and suppliers
33) False (stocks and futures) - T/F: Two most popular products traded ont he security exchange
markets are stocks and bonds
34) Fixed Assets - Tangible property used in the operations of a business
35) Fixed Exchange Rates - When a government/Central Bank ties the official exchange rate to
another country's currency or price of gold
36) Foreign Exchange Market - Currency of one country is excahnged to currency of an other country
37) Formal Agreements - Rarely fall neatly into one of the distinct stages
38) Forward Discount - What is the difference between a spot rate and forward rate?
39) Forward Exchange - Rate at which currency can be purchased in the future
40) Forward Premium - If a currency price is expected to rise in the future, what is the higher price
a buyer pays?
41) Four Tigers - South Korea, Hong Kong, Singapore, and Taiwan
42) Franchise - Selling of name, business strategies, and standard operating procedures to another
party for a fee
43) Free Trade Area - Tariffs, quotas, and preferences on most (if not all) goods among members
are removed, and each emember can determine its own trade policies with nonmembers
44) Free Trade Area - U.S.-Chile Agreement of 2003
45) Futures - Represent contracts for future delivery of a commodity
46) FX Swap - Simultaneous purchase and sale of a currency for different delivery dates
47) Global outsourcing/KANBAN clusters - Means to enhance the effectiveness of the value chain
48) Goals espoused by national governments - Peace, freedom, no violence, prosperity and
economic progress, reduce poverty, democracy/healthy environment
49) Hedging - Meansures taken by a company to protect from the loss that may occur due to
exchange rate or currency fluctuation
50) Import Quotas - Limit amount of importsinto a country; makes domestic consumers buy
domestic (Country/Region) products
51) Import Quotas - limiting the amount of imports into the country so that domestic consumers
buy products made by their countries in their region
52) Importing - Bringing in of good from abroad to trade or sale
53) In a managed float system the value of a currency is determned by market demand for supply of
a country's currency, with no predtermined target for the exchange rate as set by the
government - Explain how a managed float system differs from a floating exchange rate system
54) Indirect Quotation - European: value of domestic currency in foreign currency
55) Intermediaries - Act as facilitator for a potential supplier and consumer
56) International Monetary Fund (IMF) - Maintain order in the global monetary system
57) investors and allow foreign capital to flow in a country - What do stable exchange rates attract?
58) ISO 9000 - Set of guidelines for quality management and standards
59) It called for the development of a European Union that utilized the existing offices of the
European community, supplemented by new intergovernmental offices on foreign and security
policy, home affairs and justice - Explain what the Maastricht Treaty called for
60) Joint Venture - New firm created, owned by the alliance partners
61) Just-in-Time production or systems - Business should hold slight or zero inventory outside what
is necessary for immediate production/distribution
62) Largest Trading Blocs - NAFTA, EU, MERCOSUR, ASEAN
63) License - Allows one party to use a property right in exchange for payment to the other party
64) List 3 things the functions of the FX market allow- (1) hedging of currency for protection from
unexpected fluctuations in exchange rates (2) exchanging of currency and international
investments
(3) stabilization of weak currencies by purchasing more stable or "strong" currencies
65) List the five elements which are addressed int he process of integration - (1) alleviating the
barriers to trade of goods and services (2) reduction of barriers to investment (3) easier
movement of labor between members (4) tax and monetary policies (5) administration of the
integration agreement
66) List the five objectives behind the desire to protect the trade interest of participating regions - (1)
Establish some form of regional control regarding trade that fulfills the interests of nations within
that region (2) Establish tariffs that protect intraregional trade from "outside" forces (3) Promote
regional security and political concerns or to develope trade in such a way as to enhance the
security in the region (4) Promote South-to-South trade, e.g. between Africa and Asia and between
Latin Amercian countries (5) Promote economic and technical cooperation among developing
countries
67) List the two global environmental business agendas that trading blocs typicaly maintain
for participating nations - (1) economic benefit (2) political benefit
68) Locus of Decisions - Decisions controlled by home office or in foreign location
69) Name the two reasons that global financial markets are important to borrowers - (1) expand
the supply of money (2) Reduce the cost of money
70) Name the two reasons that global financial markets are important to lenders- (1) Reducing risk
(2) Expanding lending opportunities
71) Name two reasons (intentions) for forming a trading bloc - (1) the potential of trade creation (2)
the desire for economic protectionism
72) Network Level Decisions - Degree of centralization/decentralization, hierarchy, and number
of echelons
73) Non-Tariff Barriers - Laws and regulations affecting trade: ensure accountability and quality
74) Operation Level Decisions - Demand forecasting, inventory management, production,
procurement, transportation warehousing
75) OTC Market - Decentralized market of securities not listed on an exchange market
76) Position present in other countries - Competitive position in one country is dependent on the
77) Possess experiential/knowledge to many cultures - Global Managers
78) Preferential Trade Area - allow preferential access to certain products from certain nations via
the reduction of tariffs
79) Preferential Trade Areas - Africa, Pacific, Caribbean Pact (ACP); Lome Convention
80) Private Sector - Commercial Banks
81) Proactive - Quest for profit, Competitive Advantage, Market opportunity, Economies of scale
82) Proactive and Reactive - Market Entry Motivation
83) Productivity - Ratio of output as it relates to input
84) Public Sector - United States Department of Commerce
85) Raw Materials - Used in the manufacturer's conversion process
86) Reactive - Competitive pressure, Excess capacity, Overproduction, Declining home market
87) Regional Economic Integration - Countries reduce-remove tariff/non-tariff barriers to trade
between themselves; decide own barriers for non-members
88) Regional Trading Bloc - Group of nations in a geographic region engaged in economic
integration; core element of REI
89) Result of Regional Economic Integration - Promote economic prosperity and stability
90) Revaluation - Upward change in the currency's value
91) Spot Rates - Exchange rate of one currency in units of another currency immediately "on the spot"
92) Standardization - Maintains the various aspects of the production process/ensures
product uniformity
93) Stocks - Represents shares of equity that a company releases for sale
94) Strategic Alliance - Voluntary arrangement between companies
95) Strategic Planning Level Decisions - Performance objectives, degree of vertical
integration, outsourcing within the supply chain, what is measured
96) Strategy - Defines the goal or purpose of the organization
97) Structure - How personnel will collectively implement the strategy
98) Subsidies - Government financial assistance toward sectors of home economy;
creates/provides influx of capital
99) Subsidies - government financial assistance toward sectors of the home economy so that they
have an influx of capital
100) Successful international Expansion - Commitment from management across the organization
101) Tariff Barriers - Financial methods for protecting national industries form competition by
foreign corporations
102) the foreign exchange market followed the rule of supply and demand, and currencies started
to flow freely between sellers and buyers in currency markets - What happened after the Gold
Standard was discontinued in 1971?
103) The international economy, enabling scope and scale advantages - a result of globalization
- Describe what trading blocs are notable feature of and why
104) the largets, fastest, and most flexible currency trading market in the world - Into what has
the Foreign Exchange Market gradually evolved?
105) Theory of Constraints - Greater gain comes from identifying which parts of the process is
a constraint to the whole
106) They are committed to officiate and develop trade activities for signatory nations - To what
are trading blocs committed; what do they help integrate
107) Total Quality Management (TQM) - Tool used in managing of the total production process
to generate an exceptional product or service
108) True - T/F: The Smoot-Hawley Act of June 1930 raised US tariffs to historically high levels
109) True - T/F: Trading blocs provide protection from global competitiveness
110) Turnkey Projects - Common when developing wiith infrastructure projects or other
complex subcontracting
111) What are unstable exchange rates a sign of?- A struggling economy or an economy in crisis
112) What is the Eurocurrency Market?- a money market wherein Eurocurrency is borrowed and lent
by banks in Europe
113) World Bank - Helps finance economic development in poor countries
