ExamESSENTIALS Study Guide 2011 Edition for the CGBP exam

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Covering the latest CGBP test specification.

Table of Contents

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SAMPLE TEXT on Comparative advantage and Factors of production

The law of comparative advantage is the driving desire behind international trade. It refers to the ability of a country to produce a particular good or service at a lower marginal cost and opportunity cost than another country. It basically describes the ability to produce a product more efficiently given all the other products that could be produced. You may have it contrasted with absolute advantage which refers to the ability of a person or a country to produce a particular good at a lower absolute cost than another.

NOTE: The theory of comparative advantage best explains how trade can create value for both parties even when one can produce all goods with fewer resources than the other. The net benefits of such an outcome are being referred to as the gains from trade.

The balance of trade (aka net exports) refers to the difference between the monetary value of exports and imports of output in an economy over a certain period. It is, simply put, the relationship between a nation's imports and exports. A favorable balance of trade is a trade surplus while an unfavorable balance of trade is known as a trade deficit.

Factors of production deal with those resources employed for producing goods and services. They facilitate production but do not become part of the product or are significantly transformed by the production process. Certain factors of production such as capital and labor are typically more mobile within a country than across countries. Therefore, international trade is often more restricted to trade in goods and services, and only to a lesser extent to trade in capital, labor or other factors of production. In fact, trade in good and services can serve as a substitute for trade in factors of production. Rather than importing the factor of production, a country can simply import goods that make intensive use of the factor of production, for the purpose of embodying the respective factor.

Borderless selling describes the process of selling services to clients outside the country of origin of services through modern methods capable of eliminating the actions specifically designed to hinder international trade. International trade through "borderless selling" is primarily a phenomenon born in the "globalization" era.

The ability to assess the "environmental" factors in international trading is critical, that taking account of cultural, economic and political differences is a must when dealing with different market places of the world.

SAMPLE TEXT on Tariffs and Duties

Tariff systems are usually put in place for providing either a single rate of duty for each item applicable to all countries, or two or more rates, applicable to different countries or groups of countries. Tariffs may be grouped into two broad classifications. A single-column tariff is the simplest type of tariff which consists of a schedule of duties in which the rate applies to imports from all countries on the same basis. With a two-column tariff, the initial single column of duties is supplemented by a second column of "conventional" duties which show reduced rates agreed through tariff negotiations with other countries. A preferential tariff is a reduced tariff rate that is applied to imports from certain countries. GATT prohibits the use of preferential tariffs with the major exceptions of certain historical preference schemes.

Customs duties are of two different types, which are calculated as a specific amount per unit or specific duty, or as a percentage of the value of goods or ad valorem, or as a combination of both. Ad valorem duties are expressed as a percentage of the value of goods. Specific duties are expressed as a specific amount of currency per unit of weight, volume, length or number of other units of measurements. Alternative duties have both ad valorem and specific duties set out in the custom tariff for a given product. Compound or mixed duties provide for specific plus ad valorem rates to be levied on the same articles.

Anti-dumping duties are special. They take the form of special additional import charges designed to cover the difference between the export dumping price and the "normal" price, which usually refers to the price paid by consumers in the exporting countries. Variable import levies have the goal of raising the price of imported products to the domestic price level. Temporary import surcharges are often used from time to time for providing additional protection for local industry and, in particular, in response to balance of payments deficits.

A trade barrier refers to any government policy or regulation that restricts international trade. The barriers can take many forms. Tariffs and duties are the most common barriers.

A trade war is said to be taking place when two or more nations raising or creating tariffs or other trade barriers on each other in retaliation for other trade barriers.

SAMPLE TEXT on Management Control

You may define management control as a systematic effort by management to compare performance to predetermined standards, plans, or objectives in order to determine whether performance is in line with these standards and presumably in order to take any remedial action required to see that human and other corporate resources are being used in the most effective and efficient way possible in achieving corporate objectives. You may also perceive it as the function of the business management system that can adjust operations as needed to achieve the plan, or to maintain variations from system objectives within all allowable limits.

The basic elements in a control system include as a minimum the following: (1) the characteristic or condition to be controlled, (2) the sensor, (3) the comparator , and (4) the activator occur in the same sequence and maintain a consistent relationship to each other in every system. The first element is the characteristic or condition of the operating system which is to be measured. The second element is a means for measuring the characteristic or condition. The third element is for determining the need for correction by comparing what is occurring with what has been planned. The fourth element refers to the corrective action taken to return the system to the expected output.

Examessentials CGBP Study Guide 2011
Building your CGBP Exam Readiness

USD$59

ISBN/EAN13: 1451554826 / 9781451554823
Page Count: 250
Binding Type: US Trade Paper
Trim Size: 8" x 10"
Language: English
Color: Black and White
 

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