Factors to Consider Before Entering Export Business

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Questions and Answers

What is one of the main purposes of the export and import industry mentioned in the text?

Minimizing diplomatic relations

Expanding the scope of the domestic market

Creating barriers to international trade

Introducing the country to the global market (correct)

Why can a country not depend solely on its domestic market?

Due to limited government policies

High production costs domestically

Limited population size and less demand (correct)

Overwhelming demand from international markets

What is emphasized as crucial for successful trading between governments and partners in the export and import industry?

Good diplomatic ties (correct)

High import tariffs

Isolationist policies

Poor diplomatic relations

Why might a country export semi-finished goods to other countries, as mentioned in the text?

For further processing into finished goods Signup and view all the answers

How does the export and import industry contribute to increasing a country's income, according to the text?

By increasing foreign exchange Signup and view all the answers

What main benefit does introducing a country to the global market through export and import activities provide, based on the text?

Boost in economic growth and opportunities Signup and view all the answers

What contributes to a country exporting more than it imports?

High demand for its goods Signup and view all the answers

Which sector contributes significantly to Malaysia's GDP?

ICT (Information and Communications Technology) Signup and view all the answers

What does an outflow of funds from a country typically represent?

Importation of goods Signup and view all the answers

Which factor is driving the demand for U.S. technologies in Malaysia?

Development of connectivity and 5G ecosystems Signup and view all the answers

What is the expected growth in ICT spending in Malaysia by 2023?

$25.2 billion Signup and view all the answers

How does a country with high demand for its goods affect its currency's value?

Increases the value of its currency Signup and view all the answers

Why is exporting goods important for a country?

To boost economic indicators and job growth Signup and view all the answers

What is a disadvantage of trade business mentioned in the text?

Leads to over-specialization Signup and view all the answers

How do Free Trade Agreements benefit American exporters?

By providing better market access and lower tariffs Signup and view all the answers

What purpose does the CUSTOM TAX serve according to the text?

Impose taxes on imports and exports for state revenues Signup and view all the answers

Which statement about Malaysia's import taxes is TRUE based on the text?

Malaysia is part of a complete free trade area with five other ASEAN Member States Signup and view all the answers

What impact does exporting have on a country's domestic producers according to the text?

Boosts employment opportunities and breaks down domestic monopolies Signup and view all the answers

What is a key factor a country considers before entering the export business?

The potential market size of the country Signup and view all the answers

Why do countries need to import goods according to the text?

Due to lack of availability in the domestic market Signup and view all the answers

How can exporting lengthen a product's lifecycle?

By developing new customers in emerging markets Signup and view all the answers

What is a potential effect of imports mentioned in the text?

Lower prices for consumers Signup and view all the answers

Why is it important for a country to have good transportation and telecommunication facilities for export business?

To facilitate the movement of goods and information Signup and view all the answers

What kind of advantage does exporting provide to businesses according to the text?

Opportunity to develop new customers and expand sales Signup and view all the answers

What does a country experience when it imports more than it exports?

Trade deficit Signup and view all the answers

What is the impact of implementing a subsidy paid to domestic producers?

Increased domestic production Signup and view all the answers

What does a country experience when it exports more than it imports?

Trade surplus Signup and view all the answers

Which of the following is an item that is prohibited from exportation in Malaysia?

Endangered species products Signup and view all the answers

What aspect should be considered before entering into the trade business?

Cultural differences Signup and view all the answers

Study Notes

Export and Import Industry Purposes

One main purpose is to facilitate trade between countries, enhancing economic cooperation and growth.
Countries cannot depend solely on their domestic markets due to limitations in production capacity and consumer demand.

Successful Trading

Establishing strong relationships between governments and trading partners is crucial for effective and mutually beneficial trading.

Semi-finished Goods Export

Countries may export semi-finished goods to other nations for further processing, capitalizing on specialized labor or technology.

Income Contribution

The export and import industry plays a key role in increasing national income through job creation and foreign investment influx.

Global Market Introduction

Introducing countries to the global market via export and import activities encourages innovation and increased competitiveness.

Trade Balance

A country exports more than it imports when it has a strong production capacity and competitive advantage in specific goods.

Malaysia's GDP and Key Sectors

The manufacturing sector significantly contributes to Malaysia's Gross Domestic Product (GDP).

Outflow of Funds

An outflow of funds typically represents the value of imports exceeding exports, leading to trade deficits.

U.S. Technologies Demand

The demand for U.S. technologies in Malaysia is driven by the need for advanced solutions in various sectors, particularly ICT.

ICT Spending Growth

Expected growth in Information and Communication Technology (ICT) spending in Malaysia by 2023 is substantial, indicating rising investment in technology.

Currency Value

A country with high demand for its goods generally experiences an appreciation in its currency value due to increased foreign investment.

Importance of Exporting

Exporting goods is vital for generating revenue, expanding market reach, and fostering economic growth.

Trade Business Disadvantages

A notable disadvantage of the trade business is susceptibility to international market fluctuations and regulations.

Free Trade Agreements

Free Trade Agreements help American exporters by reducing tariffs and promoting easier access to foreign markets.

CUSTOM TAX Purpose

CUSTOM TAX serves to regulate trade and protect local industries from unfair competition.

Malaysia's Import Taxes

Malaysia's import taxes facilitate revenue generation for the government while also protecting domestic producers.

Impact of Exporting

Exporting positively impacts domestic producers by expanding their market and potentially increasing their revenues.

Export Business Considerations

A key factor for countries before entering the export business is assessing market demand and competitive advantages.

Need for Imports

Countries need to import goods to fulfill local demand for resources or products that are not readily available domestically.

Product Lifecycle Extension

Exporting can lengthen a product's lifecycle by introducing it to new markets, thus maintaining its relevance longer.

Import Effects

Imports may lead to competition with local products, impacting local producers and potentially leading to lower prices.

Importance of Infrastructure

Good transportation and telecommunication facilities are vital for the export business, ensuring efficient logistics and communication.

Exporting Advantages

Exporting provides businesses with a larger customer base, economies of scale, and diversification of markets.

Trade Imbalance Consequences

A country that imports more than it exports experiences trade deficits, which can affect its economic stability.

Subsidy Impact

Implementing a subsidy paid to domestic producers can improve competitiveness against imports by lowering production costs.

More Exports than Imports Experience

Countries exporting more than they import often enjoy increased economic strength and favorable trade balances.

Prohibited Export Items

Specific items, such as certain wildlife products, are prohibited from exportation in Malaysia to protect biodiversity.

Trade Business Entry Aspects

Key aspects to consider before entering into the trade business include market research, regulatory compliance, and logistical capabilities.

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Description

Explore the key considerations before venturing into export business, including factors like location, transportation facilities, trade partner background, laws and regulations, market potential, and more. Understand what prompts a country to import goods as well.