Global Marketing Chapter 2

1. “What is the most significant change in the world’s economy since WWII?
Before the Second World War, financial coordination was 10%, and now it is
half. Since then, all-inclusive war organisations have established themselves in
several countries. The EU and NAFTA, for example, are aided by several
institutions. The global challenge is increasing these days, consolidating the
market option of neighbouring countries. Regardless, extraordinary uniqueness
exists among the nations of the world as far as financial opportunity is
concerned.
2. “Identify the four main types of economic systems.
The four main types of economic systems are :
• Market capitalism
• Market Socialism
• Centrally Planned Sociolism
• Centrally Planned Capitalism
3. “Discuss the new changes in the world’s economy (Provide examples).”
There are three main changes in world economies:
• The increased capital volume. In 2013, the global stock and ventures trading
was valued as $24 trillion. In the most basic sense, international money trading
communicates with the world's largest market.
• The second shift is in company efficiency, which has declined from 19 percent
in 1989 to 13 percent in 2009. Companies enrolled about 9% of their
employees (supervisors) in 2011, but their proficiency has skyrocketed since
then. In a nutshell, commerce is shrinking in terms of gathering rather than
profitability.
• The rise of the global economy as the most successful budgetary unit. Agents
from Japan and China are concentrating only on their competition in the whole
market. As a result, their business practises in international marketplaces
result in positive monetary disruption in their countries.
4. “Does the struggle between capitalism and socialism still exist? Compare
between Centrally Planned Socialism and Market Capitalism.”
Yes, there is still a battle between capitalism and socialism. Both the phrases
capitalism and socialism are used to describe financial and political structures.
On a theoretical level, each of these phrases also refer to specific schools of
financial thought. One of the most significant differences between the
frameworks of capitalism and socialism is the scope of government
mediation.For the generation of wealth, the capitalist financial show relies on
free-market circumstances. The creation of products and services is based on
supply and demand in the general marketplace. An advertising economy is a
term used to describe this financial arrangement. In a social financial model, the
government controls the production of goods and services in part or
entirely. This is known as central planning, and the resulting financial system is
known as a planned economy or a command economy.
5.“Define “LDCs” and mention the assumptions that need to be corrected?”
Low-income countries (LDCs) have significant supplementary barriers to

economic development. They are extremely vulnerable to financial and natural
disasters, and their human resources are at a minimum.
Following are the assumptions:
• The poor have no money
• The poor are too concerned with fulfilling basic needs to “waste” money
on non-essential goods
• The goods sold in developing markets are so inexpensive that there is no

room for a new market entrant to make a profit.
• People in BOP markets cannot use advanced technology.
• Global companies that target BOP markets will be criticized for exploiting
the poor.
6.“What is “Balance of Payments”. Talk about current and the capital accounts.
“
The records of all the affordable trades between the inhabitant of the country
and the remaining scene are known as the balance of payments.
The balance of payments divides trades into two categories: current and capital
accounts.
In certain circumstances, the capital account is referred to as the monetary

account, with a partitioned, and in most cases, quite small, capital account
recorded separately..
7.“What country was added to the G-7 to form the G-8?
Russia
8.“Name the BRIC countries?”
The name of BRICS countries is Brazil, Russia, India and China.
9.“What are the techniques and strategies that have been developed to reduce
exchange rates risk?”
Hedging exchange rate risk entails constructing an offsetting currency position

in which a loss or gain in one currency is countered by a matching gain or loss in
another. Companies must participate in the foreign currency market in order to
use external hedging measures to manage both transaction and translation risk.
Forward contracts and currency options are examples of specific hedging tools.
Price adjustment clauses and intra-corporate borrowing or lending in foreign
currencies are examples of internal hedging approaches.
10.“What economic system does your country of origin follow? Discuss by

giving examples. (You can use the internet to do your research for this question)”
India's economy is diverse. Agriculture employs half of India's workforce,

indicating a traditional economy. The services industry employs one-third of
India's workforce and accounts for two-thirds of the country's output. The
change to a market economy in India has enabled this segment's productivity.
Several industries in India have been deregulated during the 1990s.

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1. “What is the most significant change in the world’s economy since WWII?

2. “Identify the four main types of economic systems.

The four main types of economic systems are :

• Centrally Planned Sociolism

• Centrally Planned Capitalism

3. “Discuss the new changes in the world’s economy (Provide examples).”

There are three main changes in world economies:

5.“Define “LDCs” and mention the assumptions that need to be corrected?”

Low-income countries (LDCs) have significant supplementary barriers to

Following are the assumptions:

• The poor have no money

• The goods sold in developing markets are so inexpensive that there is no

• People in BOP markets cannot use advanced technology.

In certain circumstances, the capital account is referred to as the monetary

7.“What country was added to the G-7 to form the G-8?

8.“Name the BRIC countries?”

The name of BRICS countries is Brazil, Russia, India and China.

Hedging exchange rate risk entails constructing an oﬀsetting currency position

10.“What economic system does your country of origin follow? Discuss by

India's economy is diverse. Agriculture employs half of India's workforce,

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