...Summary for Chapter 3’Interdependence and the Gains from trade’ In this chapter, I learn how the economy coordinates the activities of individuals or nation. To make a better understand, I conclude the contents of this chapter with nine questions which answers are key to the modern global economy. 1. What are opportunity costs? Are they part of the economic way of thinking? Opportunity costs ----the highest-valued alternative that must be forgone when a choice is made, are the forgone opportunities if the next best alternative. Choice means both gaining something and giving up something. When you choose one option, you forgo all others. The benefits of the next best alternative are the opportunity costs of your choice. Opportunity costs are part of every decision and activity. Each choice means giving up something else. a. Opportunity costs are the benefits that are forgone as a result of a choice. When you choose one thing, you must give up—forgo—others. b. Opportunity costs are an individual concept but can be used to demonstrate scarcity and choice for a society as a whole. 2. What is comparative advantage? Comparative advantage: the ability to produce a good or service at a lower opportunity cost than another producer. Comparative advantage exists whenever one person (firm, region, or nation) will specialize in the production of the good or service that has the lowest opportunity cost. 3. Why does specialization occur? Comparative advantage...
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...Interdependence and Conflict: An Introduction Edward D. Mansfield and Brian M. Pollins Over the past few decades, there has been a surge of interest in the relationship between economic interdependence and political con›ict. One view that has gained considerable popularity and empirical support is that heightened interdependence fosters cooperative political relations. Voiced with increasing regularity in both academic and policy circles, this claim has been used to help justify the formation of the European Economic Community, Richard Nixon’s opening to China, Willy Brandt’s Ostpolitik, and Henry Kissinger’s conception of détente with the Soviet Union. Nonetheless, critics of this argument have not been stilled. Some observers maintain that, rather than fostering cooperation, increased interdependence generates political discord. Even more widespread is the argument that economic exchange has no strong bearing on the high politics of national security. This debate is hardly new. For centuries, the nature and strength of the links between interdependence and con›ict have been the subject of heated disagreement. Until lately, however, these links remained the subject of remarkably little systematic scrutiny. In recent years, a growing number of studies have attempted to ‹ll this gap in the literature, but they have yet to resolve various crucial questions. Most important, how and to what extent does interdependence in›uence political antagonism? What are the causal...
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...importantly; theories, in the case of international relation serves as a guideline from which political leaders and international actors conduct and formulate their global political agenda. Based on the first great debate of international relations opposing the liberalism to realism, this paper will attempt to argue that democracy is not a guarantee of peace but instead it is the economic interdependence present between states; based on the realist premise that global politics is about competition for power among self-seeking states that seek to maximize their national interests. Arguments will be presented in order to support the stated thesis by consistently outlining the relationship between economic/trade interdependence and political conflict. It is clear that one of the challenges that will arise in the attempt to support the thesis will be how the key concepts are defined and understood as such this paper will provide clear concise definitions of those concepts and ideas. But mostly, those definitions will be the basis upon which the topic of ‘democratic peace’ will be approached. On the surface ideas and enquiries on interdependence and conflict may be recursive in the sense that interdependence may affect conflict but conflict may have an effect on interdependence across different relationships and at different levels. This paper will therefor focus on the effect of interdependence on conflict...
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...Complex Interdependence In 1970s, a new perspective known as transnational relations arose to question realism key assumptions of state as main and the only actor of world politics. This theory gave a new analytical framework to understand the international relations which was contrary to the state centric paradigm of realism. With complex interdependence as its central concept, this theoretical analysis advanced “synthesis of liberal + realist perspectives by constructing a way of looking at world politics and also the idea of institutionalism to foster cooperation”. It is asked how under conditions of complex interdependence world politics would be different than under realist conditions means this analysis ask to see “ what realism overlooked”. The phenomenon of Interdependence is not new; states have always been interdependent on each other for their economic functions and especially for security purposes. We have seen the complicated interdependence among states in the alliance system to achieve their political ends before First World War. The earliest example of interdependence comes from Norman Angell’s “The great illusion (1910) when he said the economic interdependence will minimize the occurrence of war on the basis of cost-benefit analysis.” Countries are dependent on each other for trade and transaction, they interact globally e.g. flow of money, goods, people and messages across international boundaries but all transactions among countries are not characterized by...
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...Introduction to Neoliberalism/Neoliberal Institutionalism The theory/theoretical framework that is used to examine cooperation between nation-states, which emphasizes the possibility of mutual gains Related terminology 1. Absolute gain: a theoretical option open to political actors based on the belief that decisions will benefit all organisations within a state and/or all member states within an intergovernmental organisation (IGO) Includes all aspects of cooperative behaviour between states; especially power ratios, economic activity and socio-cultural effects 2. Relative gain: a theoretical option open to political actors based on the belief that decisions are only intended to balance power relations between states or increase the power of one state over its rivals Generally disregards economic and socio-cultural considerations, and only allows limited cooperation between states (especially in relations where information about other states’ interests and inclinations is limited) 3. Zero-sum: a relational state wherein a participant's gain or loss is exactly balanced by the losses or gains of the other participants (assuming that total gains of the participants are added, and the total losses are subtracted, the numerical result will sum to zero) Particularly useful in competitive relations, and explains economic behaviour such as opportunity cost and absolute advantage Non-zero sum: a relational state wherein all participants act based upon their respective efficient capabilities...
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...goods, services, people, information and ideas that is driven by economic factor, which includes increasing productive potential and creating new opportunities for international trade and investment, technological factor, which involves faster information access and easier international activities, and demographical factor, which involves different characteristics and resources in different areas. According to the Essentials of International Relations by Karen A Mingst, theory is a set of propositions and concepts that seek to explain phenomena by specifying the relationships among the concepts. So theory of international relation is a set of propositions and concepts that seek to explain international relation phenomena by specifying the relationships among the concepts. Therefore the theory of international relationship is important to analyze political events and their background. For example, behind US attack to Iraq, there were issues of terrorism, Saddam Hussein as an individual, democracy, and weapon. Moreover using the theories of international relationship, individuals can explain why Iraq refused to comply with international demand initially; its strong nationalism, history of being controlled by western colonialist, and its leader’s augmented power by standing up to the west. Aside from analyzing political events and the background why certain events occur, the theory of international relation is important in terms of building...
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...2013 kihofiahwiof Environmental Factors that effects in Marketing Marketing is important in any firm in United States. Our country and many others are built on a framework of capitalism where trade is a primary source of profit. Global and domestic marketing revolves around buyers and sellers. External factors can voluntarily or involuntarily influence company’s marketing decisions. Managers of larger company tends to have wider array of choices when it comes to structuring their marketing plan and strategy because they either already have a strong marketing position to begin with, but to smaller firms they would have to take careful consideration and anticipation to any marketing decisions that uncontrollable external factors will create. In this paper, the author will discuss global interdependence and the effects of trade practices and agreements in the marketing. Also we will relate the significance of demographics and physical infrastructure variable while we examine the importance of social responsibility and ethics versus legal obligations firms consider prior to decisions. In this paper we will also analyze the effects of political systems and international relations starting with the case study summary of the Foreign Corrupt Practices Act...
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...Chapter 1 Question 1: What factors explain why the worlds trading nations have become increasingly interdependent, from an economic and political viewpoint, during the post-World War II era? The world trading nations have become increasingly interdependent because of the formation of the European community during the 1950s. In the period of 1960s the rising importance of multinational corporations helped to increase the worlds trading nation’s interdependence. While during the 1970s the world trading nations increasing interdependence was helped by the market power in world oil markets. Finally, the world trading nations increasing interdependent was affected by the creation of the Euro during the twenty first century. Chapter 2 Question 3: Develop a arithmetic example that illustrates how a nation could have an absolute disadvantage in the production of two goods and could still have a comparative advantage in the production of one of them. Question 8: What factors underlie whether specialization in production will be partial or complete on an international basis? Considering the constant cost conditions, the production possibilities schedule is a straight line. Domestic relative prices are determined exclusively by a nations supply conditions. Production gains arise from the reallocation of existing resources or static gains from specialization. A complete specialization of a country in the production of a single commodity may occur in the case of constant costs if the...
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...creative ideas to help with the marketing success of Augusta’s 19th Hole. Augusta’s 19th is currently in the phase 3 of the marketing plan. Phase three is deals with the environmental factors that affect Augusta’s 19th Hole. The environment as a whole has a great effect on the establishment. Whether it is having clean air or clean landscaping, the environment indeed has a great effect on Augusta’s 19th Hole. This paper will analyze the influence of global economic interdependence and the effect on trade practices and agreements, examine the importance of demographics and physical infrastructure, and analyze the importance of cultural differences. Analyze the influence of Global Economic Interdependence and the Effect of Trade Practices and Agreements According to C.P. Chandrasekhar "Economic Interdependence And Instability In The Global Economy" (2005), “There is little disagreement among economists that economic integration and enhanced Interdependence have been the inevitable consequences of trade and financial liberalization since the late 1970s” One would think that the Augusta’s 19th Hole would not have an interest in the global market. Augusta’s 19th Hole primary interest is to garner the attention of the larger overseas corporations so that they may want to hold seminars or conference in Augusta, GA. Team B has business contacts overseas that are willing to hold seminars and conventions at the Augusta’s 19th Hole. Team B organization has a lucrative contract...
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...similarly regardless of their type of government. As well, a state of anarchy is at the fundamental core of this argument and national interests of egoistic states as the main outward presence in international realm. Classic Realism, originally emerged from the European concert of aristocratic diplomacy. By evaluating this claim, this essay will reassert the position and importance of Offensive and Defensive Realism in our contemporary post 9/11 world. These are respectively neoclassical realism and neorealism. Firstly, a detailed account of realism will be produced highlighting the emergence of national interest as the fundamental feature or goal of sovereign states. This is done either through the maintenance of a status quo or aspiration of accumulating influence. It will be concluded that Defensive Realism or neorealism is the principal theoretical sub-school in according this claim any legitimacy. Secondly, a general evaluation of neorealism in post 9/11 world will be provided; and a comparison, and ultimately an association of anarchy and interdependence (emerging from neoliberalism) will be enunciated. Finally, resulting from the discoveries of the evaluation of realist foreign policy, principally on national interest, from neoliberal critiques; a subsequent new theoretical school will be expressed; Liberal Realism. This is demonstrated by Christopher Hill. * * To evaluate the claim that...
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...business for several years, and has expanded their business from domestic to global in just a few months. The company sells to countries all around the world and their products are well known in many countries. The first subject will cover information on environmental factors that affect global and domestic marketing decisions. The second subject will analyze the influence of global economic interdependence also the effect of trade practices and agreements. The third subject will cover the importance of demographics and physical infrastructure; also this section will analyze the influence of cultural differences. The fourth subject will cover the importance of social responsibility and ethics versus legal obligations. The fifth subject will analyze the effect of political systems and the influence of international relations; also the Foreign Corrupt Practices Act of 1977 will be analyzed, also the influence of local, national, and international legislation will be analyzed. The final subject will cover the effect of technology. Environmental Factors Every company has environmental factors that affect their global and domestic decision making. The Apple store has three environmental factors that affect their global and domestic decision making. The first environmental factor is technological, the second is competitive, and the third is social. The three factors are important and can be maintained so the company can gain success. The first factor technological factors affect...
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...for realism to be termed as a “monocausal mania” with multi-causal syntheses (John Ruggie,1989). Exogenous causes of state behavior as varying domestic interests, collective beliefs, and international institutions and norms tend to trump the effects of material power that is the core commitment of realism. Hence, there is a high tendency of differentiation between classical realists and realists who aknowledge that international politics are not independent from law, morality and economics. An example of this self-conscious dichotomy is the distinquish of realist and non-realist elements by Morgenthau in Politics among Nations. Morgenthau’s view in realist elements is exclusively summarized in the power struggle and political independence that truly resemble the state of nature described by Hobbes: ....’’ International politics would be governed solely by...considerations of political expediency...In such a world the weak would be at the mercy of the strong’’. In regards to Morgenthau and his historical predessesors from the Thucydides to Waltz, recent formulations of realism are minimalist depending to five basic assumptions 1. States are the primary actors in international politics 2. The fixed political expediency seeks the duo of secure and power: egotistical goals regarding territorial integrity and expand in the international environment 3. Self help is the primary state behavior in reaction to the anarchic external environment. Minimal realism depends...
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...within the economic scope due to its strong contemporary prominence and impact. Economic globalisation entails the interactions and interdependence of global markets, due to increased mobility of goods, services, capital and communications. Globalisation is driven by many factors, including technological advancements and deliberate neo-liberalist policy. It is not a new phenomenon, yet contemporary globalisation differs dramatically in scale, penetrating more people and remote areas than ever before. Globalisation has many benefits such as economic growth and poverty reduction, yet on a domestic scale economies must be allowed to adapt, and the global economy must be managed on an international scale. Economic interdependence and advances leads to a safer, more democratic world. The forces of globalisation have been set in motion and are not able to be reversed, hence the world must recognise globalisation as inevitable, and work to reap the benefits. Globalisation is an encompassing term, taking various forms that describing the vast social, economic, cultural and political changes that arise due to interaction and integration of people, institutions and governments of different states. Due to contemporary impact, globalisation here is defined within the scope of economic globalisation, it is a process driven by an international financial system of trade and investment. Globalisation includes the transnational movement of capital, goods and services, the spread of ideas, information...
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...Chapter 1 -The global manager’s environment Sources of Risk for International Managers -Exogenous- General environmental factors, industry-related uncertainties and some firm-specific uncertainties. -Endogenous- Uncertainties that arise from within the firm, and include managerial perceptions, attitudes and organizational perspectives. -Top two exogenous risks facing business leaders and policy makers for 2012 and the next decade would be severe income disparity (The unequal distribution of household or individual income across the various participants in the economy) and chronic fiscal imbalances (situation where all of the future debt obligations of a government are different from the future income streams) -Other issues: natural disasters such as 2011 earthquake in Japan, flood in Thailand, Political uncertainty in China and Middle East -Globalization has compounded the types and level of business risks. *Typical challenges that managers face involve politics, cultural differences, global competition, Terrorism and Technology. Managers in companies are struggling to find ways to balance their social responsibilities, their images, and their competitive strategies. -PESTEL- An analytical tool to develop and understanding of exogenous risk -Pestel analysis- Political, Ethical, Social, Technological, Environmental and legal understanding or environmental scanning that is CRITICAL if we are to strategically plan and develop our value proposition. -> Exogenous creates...
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...society companies gain a competitive edge by exploring in the domestic and global markets. Businesses that operate at domestic and global levels will eventually have to deal with issues and factors that may have some type of effect on the daily operations. Within the domestic market there are some things that makes it easier to launch the product such as geography, customer needs, demographics, and methods of distribution. To be able to capture a better marker share globalization is put in place so that new marketing shares can open up new ventures for sales. Domestic and global marketing The organization that I am most familiar with that conducts domestic and global marketing is the Toyota Motor Corporation. Toyota is the world's largest automaker (The Associated Press, 2013). Toyota is one of the top-selling brands in America and we are committed to continuous improvement in everything we do, along with breakthrough products for the future (Toyota Motor North America, Inc., 2013) The factors that impact on the marketing strategies of Toyota Motor Corporation are trade practices, demographics and physical infrastructure, cultural differences, social responsibilities and ethics, political systems and technology. These factors are challenges that effect the normal functioning of business organizations. Global economic interdependence and trade agreements Due to the influence of global economic interdependence Toyota has had to purchase parts and materials from other countries...
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