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INT-610 Midterm Answer five of the following questions. Guidelines for Submission: Your responses must be no longer than three pages in length per question, with a maximum of 15 pages. Your paper must be submitted as a Microsoft Word document with double spacing, 12-point Times New Roman font, one-inch margins, and sources cited in APA format for each question. For additional details concerning how this assignment will be assessed, please refer to the Short Paper/Case Study Analysis Rubric document in the Assignment Guidelines and Rubrics section of the course. 1. Describe at least five of the seven major forces attributed to the increasing trend in international business in recent decades and discuss their importance. 2. Describe three primary reasons companies engage in international business. Support each with an example. 3. What is culture shock and how does it affect international business? 4. Differentiate between nationalization, expropriation and confiscation, citing examples of each. 5. Political risk is defined as the risk that political decisions or events in a country will negatively affect the profitability or sustainability of an investment. List and describe the four primary risks as discussed in the text from least to most disruptive. Support each risk with examples. 6. The shift from centrally-planned to market economies resulted in a number of countries whose economic systems can be regarded as in transition. Particularly evident is the transition resulting from the fall of communism in Russia and Eastern Europe. However, similar shifts are also occurring in Africa, Latin America, and China. The transition has taken different forms in different countries because of their different histories, resources and cultures. Describe the three steps involved in the transition process. Support each step with examples. 7. What is the effect of inflation on international business? 8. Why are countries with high GNI and GDP attractive for foreign investment? 9. Why is the argument that “anything that is legal is ethical” insufficient? 10. Once a firm decides to enter a foreign market, it must then determine the best mode of entry. Depending on the level of control that a company wishes to have over its operations and the level of risk that it is willing to take, there are different modes of entry. Describe four of the five modes of entry. Version 1.3
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Running head: STEPS INVOLVED IN TRANSITION PROCESS

Steps Involved In Transition Process
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The shift from centrally planned to market economies resulted in a number of
countries whose economic systems can be regarded as in transition. Particularly evident is
the transition resulting from the fall of communism in Russia and Eastern Europe. However,
similar shifts are also occurring in Africa, Latin America, and China. The transition has
taken different forms in different countries because of their different histories, resources and
cultures. Describe the three steps involved in the transition process. Support each step with
examples.
The setup of market environment plays a very key role in streamlining how operations
within a given countries are undertaken. There are different considerations that are put into
perspective in creating a better environment where activities within a given environment are well
engaged and focus on the key underlying factors. The overall environment that is created when a
given country adopts a different market environment is vital since it can highlight the efforts that
are being put in place by the underlying factors in the economy. Some factors, therefore, drives
the economy and thus the market environment that is in place is a crucial element that specifically
shows exactly what needs to be done and how it should be done. There are different situations
where countries focus on transitioning from one type of economy to another based on the
underlying benefits that are likely to be considered in a given economy. Therefore, most of the
economies have transitioned from a centrally planned economy to market economy.
To effectively understand that transitioning process that a given economy can go through
in the transition process, it is important to understand the centrally planned economy and the
market economy to be in a better position where better decisions can be made without having a
significant influence on the entire economy. The underlying consideration in both economies is
mainly to ensure that the economy is well engaged and there are no loopholes, which can be easily

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exploited to cause disharmony in the economy. These loopholes are likely to occur in situations
where there are no significant better understanding of the key underlying issues within the
respective economy (Kolodko, 2016).
The centrally planned economy is an economy that is purely controlled by the government,
and thus the government plays a direct or indirect role in influencing the overall understanding of
the underlying issues within the economy. The decision in this economy are made by a central
body which is tasked with regulating all operations within the market, and thus all players in the
market are expected to comply with the decisions that are made by the government or single leader.
The government controls many of the resources and thus creates a much-enabled environment
where better decision making can be done without significant interference since they own key
resources within the economy. This economy is very restricted, and thus the government
significantly restricts the production and sale of goods and services since the operations are based
on the set regulations, which must be considered effectively (Kudłak, 2017).
A market economy is a free economy where there is free decision making. There is no
single player in the economy that plays a controlling role in ensuring that there is a better
understanding of the key aspects that are developed within the society. Producers and consumers
within the market economy are motivated by self-interest and the need to generate profits, thus the
efforts that are put in place a specific player are mainly aimed at ensuring that the player benefits
from its actions, and there is less influence of another player to the whole system (Sandu et.al,
2014).
Socio economic stabilization is a major transition process from centrally planned to market
economy. The transition process from a centrally planned economy to market economy is a critical
move that requires significant understanding and consideration since they are two opposite

STEPS INVOLVED IN TRANSITION PROCESS

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economies and thus there are likely to challenges regarding the sustainability of the new market
environment (Kudłak, 2017).
In centrally planned economy, the government plays all the key roles while in a market
economy, the environment is very open and thus every player makes his or her own decision to
affect their productivity in the market. Therefore, the transition process is initially characterized
by vast challenges since there is no clear engagement where the players can get knowledge on how
a market economy is operated. Trade imbalances, poor infrastructure and lack of economy
regulations are some of the key factors, which significantly influence the overall environment
where a better understanding of the economy can be based. These challenges are very adverse
creating a very difficult environment for countries to have a better understanding of the market
environment. Russia and China are some of the current countries that have undergone this
transition, and although they are effectively engaged, they still face challenges because of the
transition (Lin, 2013).
Price liberalization forms a key part of the transition process. This means that there is
significant need to ensure that there is better consideration which is put into consideration since
there is need to ensure that pricing strategy that is adopted provides a clear reflection where there
is a win- win situation for both consumers and producers by stabilizing the prices at a more
convenient position. This consideration takes significant time since there is need to create societies,
which protect the needs of both consumers and producers (Myers, 2016).
Establishment of reforms in the market, therefore, forms an environment where there is the
adoption of the new economy, and thus it is only concerned with stabilizing operations. The
reforms that are put into consideration play a very crucial role in improving the overall well-being

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of the economy. It is important to understand that the market economy is significantly guided by
regulations in the market, which are made by producers and consumers (Lin, 2013).

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References
Kolodko, G. W. (2016). during Transition to a Market Economy in Eastern Europe. Eastern
European Development and Public Policy, 39.
Kudłak, R. (2017). Drivers of corporate environmentalism: The case of the Polish economy in
transition. Journal of Cleaner Production, 142, 3194-3203.
Lin, J. Y. (2013). Demystifying the Chinese economy. Australian Economic Review, 46(3), 259268.
Myers, D. (2016)...


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