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C capital account In the balance of payments, records transactions involving the purchase or sale of assets. capital controls Restrictions on cross-border capital flows that segment different stock markets; limit amount of a firm's stock a foreigner can own; and limit a citizen's ability to invest outside the country. CARICOM An association of English-speaking Caribbean states that are attempting to establish a customs union. caste system A system of social stratification in which social position is determined by the family into which a person is born, and change in that position is usually not possible during an individual's lifetime. centralized depository The practice of centralizing corporate cash balances in a single depository. channel length The number of intermediaries that a product has to go through before it reaches the final consumer. civil law system A system of law based on a very detailed set of written laws and codes. class consciousness A tendency for individuals to perceive themselves in terms of their class background. class system A system of social stratification in which social status is determined by the family into which a person is born and subsequent socioeconomic achievements. Mobility between classes is possible. collectivism An emphasis on collective goals as opposed to individual goals. COMECON Now-defunct economic association of Eastern European communist states headed by the former Soviet Union. command economy An economic system where the allocation of resources, including determination of what goods and services should be produced, and in what quantity, is planned by the government. common law system A system of law based on tradition, precedent, and custom. When law courts interpret common law, they do so with regard to these characteristics. common market A group of countries committed to (1) removing all barriers to the free flow of goods, services, and factors of production between each other and (2) the pursuit of a common external trade policy. communist totalitarianism A version of collectivism advocating that socialism can be achieved only through a totalitarian dictatorship. communists Those who believe socialism can be achieved only through revolution and totalitarian dictatorship. comparative advantage The theory that countries should specialize in the production of goods and services they can produce most efficiently. A country is said to have a comparative advantage in the production of such goods and services. competition policy Regulations designed to promote competition and restrict monopoly practices. constant returns to specialization The units of resources required to produce a good are assumed to remain constant no matter where one is on a country's production possibility frontier. controlling interest A firm has a controlling interest in another business entity when it owns more than 50 percent of that entity's voting stock. copyright Exclusive legal rights of authors, composers, playwrights, artists, and publishers to publish and dispose of their work as they see fit. core competence Firm skills that competitors cannot easily match or imitate. counterpurchase A reciprocal buying agreement. countertrade The trade of goods and services for other goods and services. cross-cultural literacy Understanding how the culture of a country affects the way business is practiced. cross-licensing agreement An arrangement in which a company licenses valuable intangible property to a foreign partner and receives a license for the partner's valuable knowledge; reduces risk of licensing. cultural controls Achieving control by persuading subordinates to identify with the norms and value systems of the organization (self-control). culture The complex whole that includes knowledge, belief, art, morals, law, custom, and other capabilities acquired by a person as a member of society. currency board Means of controlling a country's currency. currency crisis Occurs when a speculative attack on the exchange value of a currency results in a sharp depreciation in the value of the currency or forces authorities to expend large volumes of international currency reserves and sharply increase interest rates to defend the prevailing exchange rate. currency speculation Involves short-term movement of funds from one currency to another in hopes of profiting from shifts in exchange rates. currency swap Simultaneous purchase and sale of a given amount of foreign exchange for two different value dates. currency translation Converting the financial statements of foreign subsidiaries into the currency of the home country. current account In the balance of payments, records transactions involving the export or import of goods and services. current account deficit The current account of the balance of payments is in deficit when a country imports more goods and services than it exports. current account surplus The current account of the balance of payments is in surplus when a country exports more goods and services than it imports. current cost accounting Method that adjusts all items in a financial statement to factor out the effects of inflation. current rate method Using the exchange rate at the balance sheet date to translate the financial statements of a foreign subsidiary into the home currency. customs union A group of countries committed to (1) removing all barriers to the free flow of goods and services between each other and (2) the pursuit of a common external trade policy. |
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