Podcast
Questions and Answers
What is one of the purposes of the Canada-Korea Free Trade Agreement (CKFTA)?
What is one of the purposes of the Canada-Korea Free Trade Agreement (CKFTA)?
How does Foreign Direct Investment (FDI) differ from portfolio investment?
How does Foreign Direct Investment (FDI) differ from portfolio investment?
What is a requirement of the Investment Canada Act (ICA) for non-Canadians?
What is a requirement of the Investment Canada Act (ICA) for non-Canadians?
Why is retaining R&D departments important for Canadian businesses?
Why is retaining R&D departments important for Canadian businesses?
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What is the MAPL system used for in Canada?
What is the MAPL system used for in Canada?
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What is a primary effect of international business on the Canadian economy?
What is a primary effect of international business on the Canadian economy?
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What does outsourcing refer to in a business context?
What does outsourcing refer to in a business context?
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What does Brexit represent?
What does Brexit represent?
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What is a trade surplus?
What is a trade surplus?
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What does foreign direct investment (FDI) involve?
What does foreign direct investment (FDI) involve?
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Which term describes the mutual reliance between two or more entities in economic contexts?
Which term describes the mutual reliance between two or more entities in economic contexts?
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What is the primary effect of protectionism?
What is the primary effect of protectionism?
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Which of the following represents a market for goods and services in countries other than one's own?
Which of the following represents a market for goods and services in countries other than one's own?
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What does the term 'balance of trade' refer to?
What does the term 'balance of trade' refer to?
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What does a tariff represent?
What does a tariff represent?
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What is meant by the term 'globalization'?
What is meant by the term 'globalization'?
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What is the purpose of adding value to a product or service?
What is the purpose of adding value to a product or service?
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What is a licensing agreement?
What is a licensing agreement?
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Which of the following best defines a franchise?
Which of the following best defines a franchise?
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What characterizes a joint venture?
What characterizes a joint venture?
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What is the main difference between a tariff and a trade quota?
What is the main difference between a tariff and a trade quota?
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Which scenario best illustrates the concept of protectionism?
Which scenario best illustrates the concept of protectionism?
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Which factor does NOT influence exchange rates?
Which factor does NOT influence exchange rates?
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What does an embargo entail?
What does an embargo entail?
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What is a licensing agreement?
What is a licensing agreement?
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Which term describes a business model where a company allows others to use its brand?
Which term describes a business model where a company allows others to use its brand?
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What does a tariff represent in international trade?
What does a tariff represent in international trade?
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What are trade sanctions primarily aimed at?
What are trade sanctions primarily aimed at?
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What does currency devaluation refer to?
What does currency devaluation refer to?
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Which of the following describes hard currencies?
Which of the following describes hard currencies?
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What is meant by terms of trade?
What is meant by terms of trade?
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What is a common disadvantage of investing outside one's home country?
What is a common disadvantage of investing outside one's home country?
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Study Notes
Business Fundamentals
- Business refers to organizations involved in various commercial, industrial, or professional activities.
- A transaction involves the exchange of goods, services, or money between parties.
Domestic and International Business
- Domestic business operates within a country's borders, while international business involves transactions across countries.
- Trade denotes the buying and selling of goods and services, fostering economic interdependence between entities.
Trade Dynamics
- Trading partners are countries or organizations engaged in mutual trade.
- Imports are goods/services received from abroad, while exports are sent to other countries.
- Balance of trade indicates the difference between a nation's imports and exports.
- A trade surplus occurs when exports exceed imports, providing economic advantages, while a trade deficit signifies higher imports than exports.
Market Structures
- The domestic market comprises goods/services produced within the country.
- A duty (tariff) is a tax levied on imported goods to protect domestic industries.
- Foreign markets represent opportunities for selling goods/services outside the home country.
Investment Types
- Foreign direct investment (FDI) involves controlling interests in a foreign business; contrasting with portfolio investment, which is passive and doesn’t involve control.
- Globalization signifies increased international integration of products, ideas, and culture.
Policies and Agreements
- Protectionism refers to government actions that limit trade to benefit local industries.
- CETA (Canada-European Union Comprehensive Economic and Trade Agreement) reduces tariffs on 98% of EU tariff lines for Canadian exports.
- CKFTA (Canada-Korea Free Trade Agreement) aims to reduce trade barriers across multiple sectors.
Economic Indicators
- Gross Domestic Product (GDP) measures a nation's total production of goods and services.
- Exchange rates reflect the value of one currency relative to another, influencing trade competitiveness.
Business Models and Agreements
- Licensing agreements allow one party to use another's intellectual property.
- Franchises grant rights to use a brand/business model, seen in global names like McDonald’s and Starbucks.
- Joint ventures combine resources from multiple parties for specific projects, such as Bombardier and Airbus's collaboration on the A220.
Trade Regulations
- Trade quotas place limits on the volume of goods imported, controlling market supply.
- Trade embargoes impose bans on exchanges with specific nations, such as the U.S. embargo on Cuba.
- The World Trade Organization (WTO) facilitates and regulates international trade agreements.
Currency and Economic Factors
- Floating exchange rates fluctuate based on market demand and supply.
- Currency devaluation intentionally lowers the exchange rate to enhance export competitiveness.
- Hard currencies are stable and widely accepted, while soft currencies are less stable and harder to exchange internationally.
Canadian Business Context
- Canadians invest abroad to gain access to larger markets and diverse resources, yet face risks like political instability.
- Retaining R&D in Canada encourages innovation and competitive advantage, essential for long-term growth in a global market.
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Description
This quiz covers essential concepts from Chapter 1 of Business, including definitions of business, transactions, and the distinctions between domestic and international activities. Test your understanding of key terms like trade and interdependence within the commercial landscape.
