Bussines

Question 1

Value Added

Answer 1

*The amount of worth that is added to a product at each stage of processing. It is the difference between the cost of the raw materials and the finished goods

Companies that focus on the extraction of primary goods do not make as much money as those that process these goods.

Question 2

Top 10 Import Countries

Answer 2

United States, China, Mexico, Germany, Japan, South Korea, Italy, United Kingdom, France, and Vietnam

Question 3

Top 10 Export Countries

Answer 3

United States, China, United Kingdom, Japan, Mexico, Germany, South Korea, Netherlands, India, and Honk Kong

Question 4

Exchange rates

Answer 4

The exchange rate is the amount of currency in relation to the currency of another country. The Canadian dollar is often quoted with respect to the U.S. dollar, the euro, or the
British pound.

Question 5

Currency speculation

Answer 5

Involves buying, holding, or selling foreign currency in
anticipation of its value changing. It is done to profit from the fluctuations in its price

Question 6

Currency valuation

Question 7

Floating rates

Answer 7

An exchange rate that is not fixed in relation to other
currencies.

The price at which currency with a floating rate is bought
and sold fluctuates according to supply and demand. If
demand is greater than supply, the value of the Canadian
dollar increases.

Question 8

Joint venture

Answer 8

A common type of international business, in which a new
company with shared ownership is formed by two
businesses, one of which is usually located in the country
where the new company is established.

Question 9

Foreign subsidiary

Answer 9

Often referred to as a wholly owned subsidiary, a branch
of a company that is run as an independent entity in a country outside of the one in which the parent company
is located.

The parent company often sets financial targets, and
allows the subsidiary to manage its own day-to-day
operations as long as those targets are met.

Question 10

Outsourcing

Answer 10

Outsourcing is the business practice of hiring a party outside a company to perform services or create goods that were traditionally performed in-house by the company’s own employees and staff. Outsourcing is a practice usually undertaken by companies as a cost-cutting measure.

Question 11

Licensing agreement

Answer 11

An agreement that grants permission to a company to use a product, service, brand name, or patent in exchange for a fee or royalty. Often only applicable to a specific region.

Question 12

Trade quotas

Answer 12

A government-imposed limit on the amount of product that
can be imported in a certain period of time. Canadian products subject to US quotas include beef, cotton, wool and man-made fibres.

The imposition of a tariff or quota causes prices to rise, however the difference is a tariff generates revenue for the
government, while with a quota the increase in revenue is kept by the producers

Question 13

Embargoes

Answer 13

A government-imposed ban on the trade of a specific product
or with a specific country is often declared to pressure
foreign governments to change their policies. When trade between countries is banned completely.

Eg – Canadian beef in 2003 due to BSE – 30 countries, $ billion of
lost sales

Question 14

Protectionism

Answer 14

The theory or practice of shielding domestic industries
from foreign competition, often through trade barriers
such as tariffs.

Question 15

Soft Currencies

Answer 15

A currency belonging to a country with an economy that is small, weak, or fluctuates often, and is difficult to convert into other currencies, such as the Russian ruble or the
Chinese yuan.

Question 16

Sanctions

Answer 16

Trade sanctions are often referred to as partial embargoes and may involve limiting the trade of specific products or with specific companies or individuals.

Question 17

Franchise

Answer 17

An agreement granted to an individual or group by a
company to use that company’s name, services, products, and marketing.

For a fee, the franchisor provides support to the franchisee in the areas of financing, operations, human resources, marketing, advertising, quality control, etc.

Question 18

Trade barriers

Answer 18

Governments set up rules and regulations to protect local
businesses, generate revenue and protect citizens from
harmful products; however, many of these regulations
discourage international trade. This shielding against foreign
competition is called protectionism.

Question 19

Standards

Answer 19

Standards (in areas such as environmental protection,
voltage in electronic devices, and health and safety) can
become trade barriers when countries have different criteria
for what is acceptable.

Question 20

Currency Fluctuations

Answer 20

Currency fluctuations are a barrier to international trade
because of the uncertainty, they create in trying to price
goods and services accurately.

Question 21

Exclusive distribution rights

Answer 21

A form of licensing agreement that grants a company the
right to be the only distributor of a product in a specific
geographic area or country.

Often used as an initial entry into a foreign market.

Question 22

Tariffs

Answer 22

Taxes or duties charged on imported products or services. A tariff raises the cost of imported goods so that consumers will purchase locally manufactured products instead of imports. Tariffs, the most common type of trade barrier, are taxes or duties put on imported products or services.

Question 23

Winners of the high Canadian dollar

Answer 23

-Importers
-Canadian travellers
-Major league sports teams in Canada

Question 24

Loser of high Canadian dollar

Answer 24

-Exporters
-Canadian tourism
-Canadian retailers

Question 25

Syria Sanction

Answer 25

Arms embargo, imported good, export luxury

Question 26

Somalia Sanction

Answer 26

Export import restriction to arms

Question 27

North Korea Sanction

Answer 27

Asset freeze, Prohibits the export to the DPRK
Prohibits financial support fo trade with the DPRK

Question 28

Myanmar (Burma) Sanction

Question 29

Import
This is for Evan because I don’t how his been doing business for 3 months and still doesn’t know what this is.

Answer 29

An import is a good or service bought in one country that was produced in another. Imports and exports are the components of international trade.

Question 30

Export
This is for Evan because I don’t how his been doing business for 3 months and still doesn’t know what this is.

Answer 30

Exports are goods and services that are produced in one country and sold to buyers in another. Exports, along with imports, make up international trade.

Question 31

Problems with Standards

Answer 31

-Cannot simply assume that all countries have the
same standards
-if a market is large enough, products can be made
to your specifications e.g. Ford Edge and MKX
made for U.S. in Oakville

Question 32

Three types of standards

Answer 32

Production
Service
Ethics

Question 33

Hard Currency

Answer 33

Stable currencies, such as the euro, and the U.S. and
Canadian dollars, which are easily converted into other
currencies on the world exchange markets.

Question 34

Foreign Investment Restrictions

Answer 34

Many laws in Canada influence the rules and regulations
around foreign investment. The Investment Canada Act, the Bank Act, the Transportation Act, the Broadcasting Act, and
the Telecommunications Act all limit the amount of foreign
ownership in each of these sections.