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global biz ch 7/8

Terms in this set (41)

government stability
___________ is good for business
foreign investment
rule of law encourages ___________ because foreign business know that their foreign interest will be protected
public law, private law, extraterritoriality, conflict resolution
4 aspects of the "rule of law"
international public law
laws that govern relations between governments/countries (treaties)
international private law
laws that govern transactions/behavior of individuals and business
treaties
formal agreements between the governments of two or more countries
extraterritoriality
governments attempt to enforce their laws beyond borders
litigation, arbitration, incoterms
conflict resolution approaches
litigation
a legal proceeding to determine and enforce a particular right
arbitration
a dispute resolution mechanism that is an alternative to litigation where both parties agree to dispute outside of the court.
incoterms
universal trade terminology developed by the international chamber of commerce
competition/anti-trust, torts, foreign corrupt practices act, intellectual property
4 areas of business law
competition/ antitrust
intend to prevent inappropriately large concentrations of economic power (monopolies/price fixing/market sharing)
intellectual property
patents, copyright, trademark, trade names, trade secrets
patents
government grant giving the inventor of a product or process the exclusive right to use, exploit, manufacture, sell that invention or process.
torts
injury inflicted intentionally or through negligence.
strict liability
US has ________ which mean that they do not have to prove negligence.
product liability
company is liable and possibly subject to fines or imprisonment if their product causes death or injury
buyer beware
in Japan law on product liability requires that the plaintiff prove design or manufacturing negligence
FCPA
prevents individuals from making special payment to foreign governments for special treatment or bribery. some say this limits US governments attempt to compete abroad because it would demand a higher standard of behavior.
International monetary
The ________________ system consists of institutions, agreements, rules, and processes that allow for the payments, currency exchange, and movements of capital across international borders that are required by international transactions.
bretton woods system
(1945-1971) fixed exchange rates only traded for gold & vice/versa

"gold exchange standard" "fixed rate system"
gold standard
British gov; acts as a world bank; desired for simple
bank for international settlements
international organization of central banks (fed reserve), forum for international monetary cooperation, center for research, go between for governments
reserves
assets held by the central bank used to back up government liabilities.
triffin paradox
a national currency that is also a reserve currency will eventually run a deficit, which leads to lack of confidence in the reserve currency and a financial crisis
special drawing rights
an international reserve asset established by the IMF; the unit of account for the IMF, and other international organizations
exchange rate, spot rate/forward rate, ppp
financial forces
exchange rate
product prices and investment value
spot rate
exchange rates between two currencies for delivery within two business days
forward rate
exchange rate between two currencies for delivery in the future
ppp
shows the number of units of a currency required to buy the same basket of goods and services in the foreign market that one dollar would buy in the US or other home markets.
arbitrage
taking advantage of two prices for the same commodity by buying where it is cheap and selling where it is expensive. no risk
currency exchange controls
government can limit the amount of currency that can be exchanged for another currency in a particular transaction. (developed countries have few or none)
taxation
cost = raise in price.....used to generate revenue.
inflation and interest rates
________ = debt (high inflation)
higher debt
increasing inflation encourages borrowing which leads to ___________
balance of payments
record of countries transactions with the rest of the world
exports
if a country ___________ more: a higher demand for other country's currency and in turn....a stronger currency.
imports
if a country __________ more: currency expected to weaken.
rise
inflation rates cause the cost of G&S produced in a country to _________
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