Globalization Basics
The process of growing interdependence among the world’s economies is called what?
Globalization
Give one main reason businesses expand internationally.
To reach new customers
What is the simplest form of international business activity?
business activity?Exporting
Taxes placed on imported goods are called what?
Tariffs
What global institution promotes free trade and open markets worldwide?
World Trade Organization (WTO)
What term describes how goods, services, and capital move worldwide, making competition global in scope?
Global economy
What is it called when jobs are moved to foreign locations to save on costs?
Outsourcing
What is a business arrangement that allows one company to use another’s brand or process in another country?
Licensing or Franchising
What are non-tariff barriers?
Quotas or government restrictions that limit imports
What trade alliance connects the U.S., Canada, and Mexico?
USMCA (formerly NAFTA)
What does globalization increase among national economies?
Interdependence
What is it called when foreign companies create domestic jobs?
Insourcing
What type of entry involves shared ownership between foreign and local partners?
Joint Venture
What is protectionism?
Policies that favor domestic producers through tariffs or subsidies
What European organization combines political and economic cooperation among 28 nations?
European Union (EU)
True or False: Globalization only affects large multinational corporations.
False — it affects all types of businesses.
What term describes bringing jobs back from foreign countries to the home country?
Reshoring
What do we call a foreign operation completely owned by a company?
Foreign Subsidiary
What is the risk of losing money due to changing exchange rates called?
Currency Risk
What U.S. law bans bribery of foreign officials by American companies?
Foreign Corrupt Practices Act (FCPA)
What term describes when countries restrict foreign ownership in joint ventures to protect domestic industries and control decision-making power?
Economic nationalism
Name two challenges companies face when going global
Cultural differences and legal barriers
A new operation built from the ground up in a foreign country is known as what?
Greenfield Venture
What is the purpose of a political risk analysis?
To forecast how political events may impact business investments
What ethical issues often arise in global business involving poor working conditions or child labor?
Sweatshops and child labor