General Mfg

question 17

Essay

General Mfg.& Tool Co is a small company producing industrial machinery,including a special computer-controlled milling machine capable of producing ball-bearings that can meet the tiniest known industrial specifications.Many firms using this machine sell their output to defence contractors in the USA and Canada,but the output finds its way into a great many consumer goods as well,such as VCRs and automobiles.You are approached as a trade consultant by the president of GMT Co.,and asked to make recommendations about licensing the production of the machines in South-East Asia.Describe what steps GMT Co should take to determine the exportability of their licence,and describe the major advantages of licensing.Further describe for GMT Co.what should go into any good licensing agreement.

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Definitions:

Great Recession

The severe global economic downturn that occurred from late 2007 through mid-2009, characterized by significant declines in economic activity worldwide.

Automatic Stabilizers

Automatic stabilizers are economic policies and programs, like unemployment insurance and progressive taxation, that automatically adjust to dampen economic fluctuations without additional government action.

Fair Tax

A proposed tax reform that suggests replacing current income and federal taxes with a single national sales tax to simplify the tax system.

GDP Growth

Refers to the increase in the value of all goods and services produced in a country over a specific period of time, indicating economic expansion.