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The country balance of payments is a record of transactions between the residents of one country and those of all other countries The Australian exchange rate is independently floating Purchasing power parity refers to the comparison of the purchase ability of currencies within different countries the most famous is the ‘Big Max Index’ Common barriers to entering an international market – economies of scale – capital costs – switching costs of buyers – Tariffs – Non-tariff barriers The three forms of foreign exchange risk faced by a firm include – transaction exposure – economic exposure translation exposure The classification of countries based on ‘economic structure’ is determined by factors that include: agriculture, industry and service Eight strategies for coping with recession in international markets. They include all of the following except for: 1. Pull out 2. Emphasis a product’s value 3. Change the product mix 4. Repackage the goods 5. Maintain stricter inventory 6. Look outside the region for expansion opportunities 7. Increase advertising in the region 8. Increase local procurement A high level of indebtedness in developing countries encourages them to engage in rater and countertenor. An economic union is defined as the free movement of products and factors of production across borders. Culture is dynamic, learned, prescriptive, subjective, and shared.
Culture is express in a number of ways, particularly through: – symbols, words, gestures, objects or pictures – heroes who possess qualities that are highly prized in the culture – rituals and ceremonies The two broad dimensions of culture are: culture is learned and shared. The follow are the levels at which culture operates: – Global level – National level – Industry level Language/Organizational level The iceberg principle: Non-verbal communication includes – facial expressions, – random gestures, – body posture signals High Context culture emphasize background, societal status. Information is implicit – meaning needs to be interpreted in relation to how things are said and body language. Low Context culture rules are explicit and specific.
Information is explicit meaning precise terms to how things are said and body language. Self-reference criteria (ISRC) refers to the tendency to evaluate the overseas situations in terms of your own local experiences Hefted Five Cultural Dimensions 1 . Power Distance (the degree to which inequality is accepted) 2. Individualism vs.. Collectivism (achievement is value vs.. Group equality) 3. Masculinity vs.. Femininity (strong-minded, assertive vs.. Modest, concerned with quality of life) 4. Uncertainty Avoidance (places premium on Job security, career patterns rules, trust vs.. Greater willingness to accept risk and less emotional resistance to change) 5. Long vs..