refers to the shift toward a more integrated and interdependent world economy.

refers to the merging of historically distinct and separate national markets into one huge global marketplace.

refers to the sourcing of goods and services from locations around the globe to take advantage of national differences in
the cost and quality of

(such as labor, energy, land, and capital).

its successor, the World Trade Organization; the International Monetary Fund and its sister institution, the World Bank;
and the United Nations.

(like the GATT before it) is primarily responsible for policing the world trading system and making sure nation-states
adhere to the rules laid down in trade treaties signed by WTO member states.

was set up to promote economic development.

is often seen as the lender of last resort to nation-states whose economies are in turmoil and whose currencies are
losing value against those of other nations.

was established October 24, 1945, by 51 countries committed to preserving peace through international cooperation and
collective security.

Established in 1999, the G20 comprises the finance ministers and central bank governors of the 19 largest economies in
the world, plus representatives from the European Union and the European Central Bank.

occurs when a firm exports goods or services to consumers in another country.

occurs when a firm invests resources in business activities outside its home country.

which predicts that the power of microprocessor technology doubles and its cost of production falls in half every 18
months.

Role

Communication, The Internet, Transportation Technology, Implication for the Globalization of Production, Implication for
the Globalization of Markets

refers to the total cumulative value of foreign investments by firms domiciled in a nation outside of that nation’s
borders.

is any business that has productive activities in two or more countries.

is any firm that engages in international trade or investment.

to stress that the political, economic, and legal systems of a country are interdependent; they interact with and influence
each other.

we mean the system of government in a nation. Political systems can be assessed according to two dimensions.

refers to a political system that stresses the primacy of collective goals over individual goals.

trace their intellectual roots to Karl Marx (1818–1883), although socialist thought clearly predates Marx (elements of it
can be traced to Plato.

Believed that socialism could be achieved only through violent revolution and totalitarian dictatorship.

committed themselves to achieving socialism by democratic means, turning their backs on violent revolution and
dictatorship.
These parties sold state-owned enterprises to private investors (a process referred to as

refers to a philosophy that an individual should have freedom in his or her economic and political pursuits.

refers to a political system in which government is by the people, exercised either directly or through elected
representatives.

is a form of government in which one person or political party exercises absolute control over all spheres of human life
and prohibits opposing political parties.

is a constitutional republic that operates as a representative democracy. In a representative democracy, citizens

Four major forms of totalitarianism exist in the world today. Until recently, the most widespread ____. Communism,
however, is in decline worldwide, and most of the Communist Party dictatorships have collapsed since.

is found in states where political power is monopolized by a collectively still account for about half of the Russian
economy.

has arisen from time to time in African countries such as Zimbabwe, Tanzania, Uganda, and Kenya.

A fourth major form of totalitarianism might be described as _______. generally permits some individual economic
freedom but restricts individual political freedom, frequently on the grounds that it would lead to the rise of
communism. A common feature of many right-wing dictatorships is an overt hostility to socialist or communist ideas.

all productive activities are privately owned, as opposed to being owned by the state.

the government plans the goods and services that a country produces, the quantity in which they are produced, and the
prices at which they are sold.

can be found between market and command economies. In a mixed economy, certain sectors of the economy are left to
private ownership and free market mechanisms, whereas other sectors have significant state ownership and
government.

of a country refers to the rules, or laws, that regulate behavior along with the processes by which the laws are enforced
and through which redress for grievances is obtained.

is based on tradition, precedent, and custom. ___ refers to a country’s legal history, ____ to cases that have come before
the courts in the past, and ____ to the ways in which laws are applied in specific situations.

_____ is based on a detailed set of laws organized into codes. When law courts interpret civil law, they do so with regard
to these codes.

is one in which the law is based on religious teachings. Islamic law is the most widely practiced theocratic legal system in
the modern world.

is a document that specifies the conditions under which an exchange is to occur and details the rights and obligations of
the parties involved. Some form of contract regulates many business transactions.

is the body of law that governs contract enforcement. The parties to an agreement normally resort to contract law when
one party feels the other has violated either the letter or the spirit of an agreement.

To resolve this issue, a number of countries, including the United States, have ratified the United Nations Convention on
_______The ___establishes a uniform set of rules governing certain aspects of the making and performance of everyday
commercial contracts between sellers and buyers who have their places of business in different nations.

refers to a resource over which an individual or business holds a legal title, that is, a resource that it owns.
refer to the legal rights over the use to which a resource is put and over the use made of any income that may be derived
from that resource.

refers to theft, piracy, blackmail, and the like by private individuals or groups.

to violate property rights occurs when public officials, such as politicians and government bureaucrats, extort income,
resources, or the property itself from property holders.

following revelations that U.S. companies had bribed government officials in foreign countries in an attempt to win
lucrative contracts.

language that allows exceptions known as facilitating or expediting payments (also called _______), the purpose of
which is to expedite or to secure the performance of a routine governmental action.

refers to property that is the product of intellectual activity, such as computer software, a screenplay, a music score, or
the chemical formula for a new drug.

grants the inventor of a new product or process exclusive rights for a defined period to the manufacture, use, or sale of
that invention.

are the exclusive legal rights of authors, composers, playwrights, artists, and publishers to publish and disperse their
work as they see fit.

are designs and names, officially registered, by which merchants or manufacturers can differentiate their products.

The protection of intellectual property rights differs greatly from country to country. Although many countries have
stringent intellectual property regulations on their books, the enforcement of these regulations has often been lax. This
has been the case even among many of the 192 countries that are now members of the ______, all of which have signed
international treaties designed to protect intellectual property, including the oldest such treaty, the _______, which
dates to 1883 and has been signed by more than 170 nations.

set certain safety standards to which a product must adhere.

involves holding a firm and its officers responsible when a product causes injury, death, or damage. Product liability can
be much greater if a product does not conform to required safety standards.

___ call for payment and monetary damages. ____ result in fines or imprisonment. Both civil and criminal liability laws
are probably more extensive in the United States than in any other country, although many other Western nations also
have comprehensive liability laws. Liability laws are typically the least extensive in less developed nations.

per head of population. GDP is regarded as a yardstick for the economic activity of a country; it measures the total
monetary or market value of all the finished goods and services produced within a country’s borders in a specific time
period.

Differences in the cost of living, one can adjust GDP per capita by purchasing power. Referred to as a ______ adjustment,
it gives us a more direct comparison of living standards in different countries.

to measure the quality of human life in different nations.

broadly to include not just new products, but also new processes, new organizations, new management practices, and
new strategies.

first commercialize innovative new products and processes, and entrepreneurial activity provides much of the dynamism
in an economy.

involves removing legal restrictions to the free play of markets, the establishment of private enterprises, and the manner
in which private enterprises operate.
are the advantages that accrue to early entrants into a market.

are the handicaps that late entrants might suffer.

A number of political, economic, and legal factors determine the costs of doing business in a country.

of doing business in a country are determined by a number of political, economic, and legal factors.

has been defined as the likelihood that political forces will cause drastic changes in a country’s business environment
that adversely affect the profit and other goals of a business enterprise.

can be defined as the likelihood that economic mismanagement will cause drastic changes in a country’s business
environment that hurt the profit and other goals of a particular business enterprise.

can be defined as the likelihood that a trading partner will opportunistically break a contract or expropriate property
rights.

a country as a potential market or investment site for an international business depends on balancing the benefits, costs,
and risks associated with doing business in that country.