Podcast
Questions and Answers
How does international trade contribute to increased employment opportunities within a country?
How does international trade contribute to increased employment opportunities within a country?
- By encouraging reliance on domestic products, shielding local industries from foreign competition.
- By focusing solely on portfolio investments, which indirectly fund job growth in specific sectors.
- By enabling businesses to access larger global markets, which can lead to expansion and job creation. (correct)
- By limiting businesses to local markets, thus ensuring job security within those confines.
A Canadian company wants to produce a product that requires a specific raw material not available in Canada. How can international trade help this company?
A Canadian company wants to produce a product that requires a specific raw material not available in Canada. How can international trade help this company?
- By subsidizing the cost of producing the product domestically using alternative materials.
- By providing access to foreign markets where the raw material can be sourced and imported. (correct)
- By establishing international subsidiaries to extract and process the raw material in foreign lands.
- By enforcing trade barriers to discourage the production of goods that require foreign materials.
What is the primary difference between foreign direct investment (FDI) and portfolio investment?
What is the primary difference between foreign direct investment (FDI) and portfolio investment?
- FDI involves purchasing foreign stocks, while portfolio investment involves controlling foreign business operations.
- FDI is inherently riskier than portfolio investment due to currency exchange fluctuations.
- FDI is strictly limited to investments in manufacturing, while portfolio investment covers all other sectors.
- FDI involves controlling foreign business operations, while portfolio investment involves purchasing foreign stocks and bonds. (correct)
How might international collaboration in the music industry, like that of Justin Bieber and Drake, impact cultural development?
How might international collaboration in the music industry, like that of Justin Bieber and Drake, impact cultural development?
In what way does international trade foster cultural development?
In what way does international trade foster cultural development?
How can foreign firms contribute to improving production processes or product quality in a host country through international trade?
How can foreign firms contribute to improving production processes or product quality in a host country through international trade?
If a company like IKEA were restricted to selling its products only in its home country (Sweden), what would be the most significant limitation it would face?
If a company like IKEA were restricted to selling its products only in its home country (Sweden), what would be the most significant limitation it would face?
Jollibee, originally from the Philippines, has expanded to the U.S., Canada, and Hong Kong. What benefit of international trade does this exemplify?
Jollibee, originally from the Philippines, has expanded to the U.S., Canada, and Hong Kong. What benefit of international trade does this exemplify?
Flashcards
Variety of Products
Variety of Products
Access to a wider array of goods not available domestically.
New Markets, More Jobs
New Markets, More Jobs
Selling internationally expands the customer base, leading to business growth and job creation.
New Processes and Technologies
New Processes and Technologies
Foreign firms introduce innovative techniques that can lead to cost reduction and enhance product quality.
Cultural Development
Cultural Development
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Portfolio Investment
Portfolio Investment
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Foreign Direct Investment
Foreign Direct Investment
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Advantage: Product Variety
Advantage: Product Variety
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Advantage: Cultural exchange
Advantage: Cultural exchange
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Study Notes
- International trade is the exchange of goods and services between countries and it brings a lot of advantages.
- Success in understanding international trade means understanding how it helps a country.
Variety, Prices, and Foreign Markets
- International trade provides a variety of products.
- International trade leads to new markets and ultimately more jobs.
- International trade introduces new processes and technologies.
- International Trade fosters cultural development.
- Foreign investment comes as a result of international trade.
Variety of Products
- Without international trade, many products would not be available within a home country.
- Even if a country produces certain goods, people may prefer foreign brands more.
- Canada, for example, imports bananas from Costa Rica and avocados from Mexico, as these cannot be sustainably produced in Canada.
New Markets and Jobs
- Selling goods internationally results in access to a broader market.
- Brands like IKEA, if confined to Sweden, would only reach 10 million people, as opposed to billions worldwide.
- Increased sales, as a result of international trade, will expand businesses and create more jobs.
New Technologies
- Lower costs and improved products will come as a result of new production processes, or technologies, introduced by foreign firms.
Cultural Development
- International trade helps with the exchange of culture and ideas between countries, and promotes diversity.
- Cultural customs can be adopted and adapted to local culture, giving customers new ideas, tastes, and sounds.
- Canadian musicians like Justin Bieber, Drake, and The Weeknd will collaborate with other artists to introduce new sounds to the global music industry.
- Jollibee, McDonald's of the Philippines, now has more than 1000 restaurants across the U.S., Singapore, Canada, and Hong Kong.
Foreign Investment
- Portfolio investment involves foreign firms purchasing Canadian stocks and bonds.
- Foreign Direct Investment (FDI) involves foreign companies controlling some or all of a business's operations.
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