Study sets, textbooks, questions
Upgrade to remove ads
MGT302 Exam 1-Pt2
Terms in this set (45)
The risk that a party to a transaction has not entered into the contract in good faith, has provided misleading information about its assets, liabilities or credit capacity, or has an incentive to take unusual risks in a desperate attempt to earn a profit before the contract settles
A status of financial health where government expenditures exceed revenue.
accrued federal government deficits
An act the U.S. Congress passed in 1933 as the Banking Act, which prohibited commercial banks from participating in the investment banking business. The Act was passed as an emergency measure to counter the failure of almost 5,000 banks during the Great Depression. The Glass-Steagall lost its potency in subsequent decades and was finally repealed in 1999
Belief that the state should own enterprises and run them for public good rather than private profit
one person/party exercised absolute control over all spheres of life ( political repression, no free elections, free speech, or basic civil liberties)
Productive activities are privately owned, G/S a country produces is determined by demand and supply, role of government is to promote vigorous free and fair competition
G/S produces, quantity produced, prices at which G/S are sold is determined by the government
certain sectors of the economy are left alone to private ownership while other sectors have significant state ownership and government planning
attempts to influence the directions of an economy through changes in governmental taxes or through governmental spending. jobs are created when consumers, businesses, and government spends money
attempts to influence an economy by controlling interest rates and the supply of money
monetary policy tools
Banking reserve requirements, buying and selling of Gov securities, discount rates
the interest rate that the Fed charges banks for short term loans
federal funds rate
interest rates banks charge each other for overnight loans
Uses past court decisions as precedents to form future policies.
Every law is codified or written into comprehensive codes, legislation, not court rulings, is the primary source of law and the duty of the judge is to apply the law as enacted
legal systems combine religious doctrine with legal principles and have their foundation in the sacred texts of religious traditions. Word of God is foundation for nation's legal framework
The most widely practiced for of theocratic law: based on the Koran and the teachings of the Prophet Mohamed. Crimes with an exact reference in the Koran are punishable by a pre-established punishment Identified in the Koran.
A form of competitive advantage that a company earns by being the first to enter a specific market or industry. Being the first allows a company to acquire superior brand recognition and customer loyalty. The company also has more time to perfect its product or service
to transfer from public or government control or ownership to private enterprise
to remove government regulatory controls from an industry, commodity, etc.
a country should strive to maintain a trade surplus by exporting more than importing, and countries should maximize exports through subsidies and minimize imports through tariffs and quotas
The notion that imports are inherently bad for an economy
theory of absolute advantage
Countries should engage in trade when they have an absolute advantage in their ability to produce a good efficiently.
production possibility frontier
A curve depicting all maximum output possibilities for two or more goods given a set of inputs (resources, labor, etc.). The PPF assumes that all inputs are used efficiently.
Giving up something important to gain something more important.
Ricardo's Theory of Comparative Advantage
demonstrates that countries can benefit from trade even if a country has an absolute advantage of production in all products.
Resources that cannot be moved and are not easily shared, and have carrying costs
s the number of new employees increases, the marginal product of an additional employee will at some point be less than the marginal product of the previous employee.
effects of trade
statistic and dynamic
statistic effects of trade
that trade does not change a country's stock of resources or the efficiency with which it utilizes those resources.
dynamic effects of trade
free trade might increase a country's stock of resources as increased supplies of Land Labor Capital from abroad become available for use within a country. Dynamic gains in both stock of a country's resources and the efficiency it uses resources causes a country's PPF to shift outward. Effect is that the country can produce more goods than it did before introducing free trade.
proposes that differences in factor endowments and factor costs determine comparative advantage- countries should export goods that intensively use factor endowments which are locally abundant and import goods made from locally scarce factors
products life-cycle theory
A product evolves through distinct stages from its introduction to its withdrawal from the market : introduction, growth, maturity, and decline
new trade theory
countries sometimes specialize in the production and export of certain products not because of underlying differences in factor endowments, but because of economies of scale and first mover advantages.
theory of national competitive advantage
attempts to explain the reasons for a nation's success in a particular industry. Proposes four broad attributes shape the environment in which local firms compete, and these attributes promote or impede the creation of competitive advantage
porter's determinants of national advantage
1) Factor endowments, 2)firm strategy, structure, and rivalry, 3) demand conditions, 4) Related and supporting industries
basic factors of production
passively inherited or require only modest investment- natural resources: climate, location, and unskilled labor
advanced factors of production
require time and effort to develop and usually more relevant for competitive advantage- highly skilled labor, communication infrastructure and education.
generalized factor of production
Can be used by many industrial sectors, infrastructure system, capital markets
specialized factor of production
focused application opportunities, skilled personnel in a specific industry, specialized factors provide more decisive and sustainable bases for competitive advantage
National accounting system that tracks both payments to and receipts from other countries. Uses a double-entry system where each international transaction creates two offsetting entries within the three accounts. Debits= payments to other country/ Credit = receipts from other countries
The current account records transactions involving import/export of G/S, and investment income
Used to track one-time changes in the stock of assets such as debt forgiveness and migrant transfers
records transactions involving the purchase or sale of assets, including stocks, bonds, real estate, and corporations
Sets found in the same folder
MGT302 Exam 1-Pt1
MGT302 Exam 1-Pt3
MGT302 Exam 1-Pt4
Sets with similar terms
International Business - International Trade Theor…
Chapter 6 "International Trade Theory"
Bus. Chap 6-7,8
International Trade Theory
Other sets by this creator
MGT422: Exam 2-Chp9
MGT422-Exam 2: Chp6