Unit 1: International Business Overview
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Questions and Answers

Which of the following is NOT a typical concern for foreign companies doing international business?

  • Fluctuating exchange rates
  • Cultural differences
  • Political instability
  • Guaranteed high profits (correct)

Canada is primarily an exporting nation, meaning it sends more goods and services to other countries than it receives.

False (B)

Name three products that are among Canada's top exports.

oil, vehicles, and machinery

A ______ dollar is generally good for exporters because their goods become cheaper for foreign buyers.

<p>depreciating</p> Signup and view all the answers

Match the following terms with their descriptions:

<p>Importing = Bringing goods or services into a country from abroad Exporting = Sending goods or services to another country for sale Trade deficit = A situation where a country imports more than it exports Trade surplus = A situation where a country exports more than it imports</p> Signup and view all the answers

Which of the following best describes crude oil?

<p>Unprocessed oil directly from the ground (D)</p> Signup and view all the answers

The TransMountain pipeline currently transports the majority of Canada's oil exports.

<p>False (B)</p> Signup and view all the answers

Besides fuel, what are two other uses for oil?

<p>plastics and chemicals</p> Signup and view all the answers

Which of the following best defines 'geopolitical'?

<p>Relating to the relationship between geography and politics (A)</p> Signup and view all the answers

China is currently considered a democratic country.

<p>False (B)</p> Signup and view all the answers

What is the concept of opportunity cost?

<p>The value of the next best alternative forgone when making a decision.</p> Signup and view all the answers

NAFTA gives all 3 countries access to each other's _________.

<p>markets</p> Signup and view all the answers

Match the following trade agreements with their acronyms:

<p>North American Free Trade Agreement = NAFTA United States-Mexico-Canada Agreement = USMCA Canada-United States-Mexico Agreement = CUSMA</p> Signup and view all the answers

What is the primary goal behind the formation of NAFTA, now USMCA or CUSMA?

<p>To reduce tariffs and facilitate trade among member countries (B)</p> Signup and view all the answers

A decrease in corporate taxes in the US would likely help Canada economically.

<p>True (A)</p> Signup and view all the answers

If the value of our dollar decreases, can we import more or less cheaply?

<p>Import more cheaply</p> Signup and view all the answers

According to the content, what is a significant threat resulting from potential tariffs on Canadian exports?

<p>Job losses in specific sectors (A)</p> Signup and view all the answers

The European Union is primarily a fiscal union.

<p>False (B)</p> Signup and view all the answers

What does the acronym WTO stand for?

<p>World Trade Organization</p> Signup and view all the answers

Due to Brexit, importing from the EU is much more ______ which has harmed the _______ sector.

<p>hard, import</p> Signup and view all the answers

Match the descriptions with the correct term:

<p>Monetary Policy = Controls interest rates and money supply Fiscal Policy = Government spending and tax rates Monetary Union = Shared currency and monetary policy Fiscal Union = Unified government taxes and spending</p> Signup and view all the answers

What is a common consequence of the labor market in former industrial powerhouses?

<p>Highly unionized labor (C)</p> Signup and view all the answers

The content indicates that the goal is for monetary policy and fiscal policy to operate separately.

<p>False (B)</p> Signup and view all the answers

What was a key problem in Greece in 2008?

<p>sovereign debt crisis</p> Signup and view all the answers

What is a tariff?

<p>A tax on imported goods (D)</p> Signup and view all the answers

All countries are part of the WTO.

<p>False (B)</p> Signup and view all the answers

What primary sector are low-income countries looking to trade in?

<p>Agriculture</p> Signup and view all the answers

The WTO implements _______ to protect Canada's _____________ from stronger countries like __________________.

<p>rules</p> Signup and view all the answers

Match the following trade terms with their definitions:

<p>Tariff = A tax on imports Sanction = A penalty for a country not complying with international law Trade embargo = A ban on trade with a specific country Supply management = Control of production of certain goods</p> Signup and view all the answers

What is the purpose of a trade embargo?

<p>To restrict trade with a specific country (B)</p> Signup and view all the answers

Supply management leads to higher prices for consumers in Canada.

<p>True (A)</p> Signup and view all the answers

Why is supply management considered a barrier to trade?

<p>It restricts the amount of foreign dairy products that can enter Canada.</p> Signup and view all the answers

Which provinces have a significant number of dairy, egg, and poultry farmers?

<p>Quebec and Ontario (C)</p> Signup and view all the answers

Consumers are indifferent to the prices of dairy goods due to supply management.

<p>True (A)</p> Signup and view all the answers

What is OPEC?

<p>Organization of the Petroleum Exporting Countries</p> Signup and view all the answers

The USA is now an energy __________.

<p>superpower</p> Signup and view all the answers

Why do Canada and other nations sanction countries?

<p>Due to military aggression (A)</p> Signup and view all the answers

What impacts did the trade embargo have?

<p>Economic downturn, increased prices for consumers, and reduced availability of goods.</p> Signup and view all the answers

Sanctions on other countries are often effective in changing government behavior.

<p>True (A)</p> Signup and view all the answers

Which of the following factors can cause the value of a dollar to drop?

<p>Increased tariffs (B)</p> Signup and view all the answers

A floating dollar is not influenced by the market forces of supply and demand.

<p>False (B)</p> Signup and view all the answers

What is BYD known for manufacturing?

<p>Electric vehicles and batteries</p> Signup and view all the answers

Traditionally, our dollar value has been pegged to the price of ____________.

<p>gold</p> Signup and view all the answers

Match the following terms related to lumber with their descriptions:

<p>Crown land = Public land owned by the government Stumpage fees = Fees paid for harvesting trees Softwood lumber = Lumber derived from coniferous trees Tariffs = Taxes imposed on imported goods</p> Signup and view all the answers

What is the primary consequence of applying tariffs on softwood lumber?

<p>Decreased demand for Canadian wood (C)</p> Signup and view all the answers

All countries have the same tariff rates for softwood lumber.

<p>False (B)</p> Signup and view all the answers

In what area does Maersk primarily operate?

<p>Shipping and logistics</p> Signup and view all the answers

Flashcards

Trade Deficit

A situation where a country imports more goods and services than it exports, resulting in a negative balance of trade.

Trade Surplus

A situation where a country exports more goods and services than it imports, resulting in a positive balance of trade.

Depreciating Dollar

The value of a country's currency decreasing against other currencies.

Appreciating Dollar

The value of a country's currency increasing against other currencies.

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Exporting

The process of selling goods and services to another country.

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Importing

The process of buying goods and services from another country.

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Comparative Advantage

Countries export and import goods and services based on their comparative advantage, meaning they specialize in producing goods and services they can produce more efficiently than other countries.

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Factors Affecting Imports

Factors affecting a country's ability to import include economic growth, consumer confidence, exchange rates, trade policies, and resource availability.

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Rule of Law

A system where laws are consistently applied and enforced, regardless of individual circumstances or power.

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WTO (World Trade Organization)

An international organization that promotes free trade and sets rules for global commerce. It aims to reduce trade barriers and resolve disputes.

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Monetary Policy

A set of policies designed to influence the economy's overall performance. It includes actions like adjusting interest rates or government spending.

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Fiscal Policy

A set of policies used by the government to influence the economy, such as taxation, spending, and government borrowing.

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Monetary Union

A group of countries that have agreed to coordinate their economic policies and share a single currency.

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Fiscal Union

A group of countries that have agreed to coordinate their fiscal policies, such as taxation and spending.

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Digital Service Tax

A tax imposed on digital services, such as online advertising or streaming platforms. It's considered a retaliatory tariff.

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Targeted Tariff on a State

A tariff imposed specifically on goods imported from a particular state within a country. It's a targeted form of retaliation.

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Trade Deficit/Surplus

The balance of a country's imports and exports. A surplus means a country exports more than it imports, while a deficit means it imports more than it exports.

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Global Headline Inflation

An economic indicator that tracks overall price changes in a basket of consumer goods and services.

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Subsidies

A government payment to businesses to reduce their costs and encourage specific activities, like production or research.

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Opportunity Cost

The value of the alternative you give up when choosing another option.

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Economic Turmoil

A situation where prices rise rapidly, often leading to economic instability and hardship.

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Multiplier Effect

The effect of a single economic change multiplying across the economy, affecting many industries and individuals.

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Blocs

A group of countries that have joined together to form a trading bloc, often with shared interests and policies.

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Globalization

A term referring to the interconnectedness and interdependence of nations through trade, investment, and cultural exchange.

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Trade Quota

A system used by governments to regulate the quantity of particular products that can be imported into a country.

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Trade Embargo

An agreement between two or more countries to restrict or completely ban trade with each other.

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Non-Tariff Barriers

A barrier to trade that involves using legal measures like quotas, standards, and regulations to make it difficult for foreign goods to enter a market.

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Supply Management

Regulations that dictate how much a specific good or service can be produced and sold within a country, often with the aim of stabilizing prices.

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Tariff

A government-imposed tax on imported goods.

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Currency Exchange

The process of converting one currency to another, involving exchanging money at a specific rate.

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Sanction

A form of economic punishment used by countries against other countries, involving restrictions on trade or financial transactions.

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Trade Barriers

Trade barriers are regulations that make it harder for goods and services to move freely between countries, impacting Canada's economy by making goods more expensive for consumers and limiting potential exports.

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Depreciating Currency

A situation where a country's currency weakens against other currencies, making imports more expensive and exports cheaper.

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Appreciating Currency

A situation where a country's currency strengthens against other currencies, making imports cheaper and exports more expensive.

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Carbon Adjustment Tax

A tax imposed on goods imported into a country, typically designed to protect domestic industries and raise revenue.

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OPEC (Organization of the Petroleum Exporting Countries)

A group of oil-producing countries that work together to coordinate oil production and pricing policies.

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Trade Sanction

A type of economic sanction that restricts or limits trade with a specific country, but does not completely shut it down.

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Dollar Value

The value of one currency compared to another. It affects the cost of imports and exports, influencing businesses and jobs.

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Floating Dollar

A situation where a country's currency is allowed to fluctuate freely in the market based on supply and demand.

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Fixed Dollar

A situation where a country's currency is fixed to a specific value against another currency or a basket of currencies.

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Stumpage Fees

A fee charged by a government for the right to harvest timber from public lands.

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Supply Chain

A chain of organizations involved in the production, distribution, and sale of goods or services. It includes suppliers, manufacturers, distributors, and retailers.

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Transportation

The process of moving goods from one place to another, using various transportation methods like ships, trucks, and trains.

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Plus One Strategy

A strategy where companies expand their operations into new countries, but maintain a strong focus on their core operations in their home country. This helps to diversify risk and access new markets.

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Study Notes

Unit 1: International Business

  • Has international business made Canadians wealthier?
  • International business looks like exporting and importing goods.
  • Five benefits to international business: greater access to goods, lower costs, increased competition, economic growth, and specialization.
  • Five downsides to international business: job losses in domestic industries, exploitation of workers, environmental damage, trade imbalances, and dependency.
  • Five concerns for foreign companies: high competition, government regulations, currency fluctuations, differing business practices, and political instability.
  • Walmart maintains low prices through efficient supply chains.
  • Canada is an important exporter of goods, particularly resources and food.
  • Importing means bringing in goods from other countries.
  • Exporting means sending goods to other countries for sale.

Unit 1: Canadian Exports

  • Top three Canadian exports: focus on natural resources, including crude oil and agricultural products.
  • Countries import/export raw materials and finished goods for domestic consumption or to other countries.
  • Oil export is a significant part of Canada's GDP.
  • Oil is used for fuel, manufacturing, and electricity generation.
  • Five Canadian provinces refine oil: Alberta, Saskatchewan, Manitoba, Ontario, and New Brunswick.
  • Oil pipelines end in the US or elsewhere.
  • Economic benefits of oil: employment, revenue for the government, economic activity and investment.
  • Economic downsides of oil: environmental concerns, reliance on the global market, volatility of prices.
  • Top oil consumers in the world: the US, China, India.
  • Canada ranks highly in producing oil.
  • Canadian oil comes from crude oil extraction and tar sands.
  • Refining tar sands oil is more expensive.
  • Canadian production of oil increases with higher prices.
  • Canada's reliance on oil production needs consideration.

Unit 1: Oil Pipelines and Canada's Economy

  • BPD stands for barrels per day.
  • Global oil production: estimates for world daily production in barrels.
  • Canada's oil exports in barrels per day.
  • TransMountain pipeline history: a timeline of the pipeline's development.
  • TransMountain pipeline capacity in barrels.
  • Potential sellers to the TransMountain pipeline: details about potential buyers.
  • Government spending on the pipeline: details on amounts spent.
  • Canadian imports.
  • Criticality of imports vs. exports.
  • Countries known for trade surpluses and deficits.
  • Canada's trade balance: states whether a trade deficit or surplus exists.

Unit 2: Factors Influencing International Trade

  • Factors influencing a country's ability to import: fluctuations in exchange rates, tariffs and trade restrictions, and availability of goods and services.
  • Canadian imports: types of goods and services imported.
  • Exchange rates affect importing/exporting costs.
  • Factors influencing currency value: geopolitical factors, market sentiment, interest rates, economic growth, risk aversion, and inflation.
  • Impact of China's economic policies on international trade.

Unit 2: Temporary Foreign Workers (TFWs)

  • TFWs come to Canada for temporary work.
  • Five sectors that employ TFWs.
  • Sizes of companies that recruit TFWs.
  • Upsides of recruiting TFWs. The role of TFWs in Canadian economy.
  • Downsides of using TFWs: effects on the local labor market, supply and demand issues in various sectors.
  • Import concentration issues: focus on questions regarding trade, supply, and demand.

Unit 2: Canada's Trade Partners and Economy

  • Canada's largest trade partner.
  • Percentage of exports going to that partner.
  • Types of goods Canada exports to its largest trade partner.
  • Importance of stability in trading partner countries.

Unit 3: China's Role in the Global Economy

  • China's role as a top global economy: aspects that contribute to this standing.
  • The nature of China's economic system: Is it a democracy?
  • Basis of China's economy: focus on its foundational economic sectors.
  • China's wage policies and their effect on businesses.
  • Inflation concerns in Canada.
  • Economic sector shift in China.
  • Impact of a potential Chinese recession vs. a US recession.

Unit 4: Trade Agreements and Policies

  • NAFTA, USMCA, and CUSMA definitions and differences.
  • Countries involved in each agreement.
  • Discussion of NAFTA's impact.
  • Trump's actions toward NAFTA: goals, actions, and their impact.

Unit 5: Trade Barriers and International Trade

  • Definition of a trade sanction.
  • Purpose of a trade sanction.
  • Examples of countries subject to trade sanctions by Canada.
  • Trade embargo examples and impact on trading countries.
  • Trade quota examples.
  • Supply management definitions and impacts.
  • Benefits and drawbacks of supply management.
  • Discussion of the issues with supply management.
  • Impact of sanctions on consumers and businesses.
  • Economic disruption from embargos.

Unit 5: International Trade Agreements (cont.)

  • WTO definition and roles played.
  • WTO creation date and problems that need to be solved.
  • Canada's dependence on the WTO.
  • Dispute mechanisms and examples.

Unit 6: Supply Chains, Logistics, and Transportation

  • Definition of supply chain.
  • Factors affecting supply chains.
  • Overview of the world's largest shipping company.
  • Critical logistical routes and transportation methods impacting goods traffic: analysis of bridges and highways as a key infrastructure.
  • Economic aspects of specific supply chains.

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Explore the fundamentals of international business and its impact on the Canadian economy. This quiz covers topics such as the benefits and downsides of international trade, concerns for foreign companies, and Canada's role in exporting goods. Test your understanding of how international business shapes wealth and competition in Canada.

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