Ch 29

Question 1

What are exports

Answer 1

Products or services produced in one country and for sale in another

Question 2

What is bilateral trade

Answer 2

Trade between two countries

Question 3

What is a trade surplus

Answer 3

When exports are larger than imports

Question 4

What is a trade deficit

Answer 4

When imports are imports are larger than exports

Question 5

What are imports?

Answer 5

Products or services that are brought into a country from another.

Question 6

What are the four main sections of Canada’s imports?

Answer 6

1) industrial & high tech technology
2) Motor vehicle parts
3) goods produced in warmer climate
4) low cost goods

Question 7

Explain the 1st section of Canada’s imports: Industrial and high tech technology.

Answer 7

• computers, factory equipment

- –from USA, Japan, Germany, Taiwan

Question 8

explain the 2nd section of Canadian imports: (Motor Vehicle Parts)

Answer 8

Motor Vehicle Parts:

–Canadians assembly plants use parts from usa, mexico, japan

Question 9

explain the 3rd section of Canadian imports: (goods produced in warmer climates)

Answer 9

Citrus fruits, sugar, coffee, tea, spices, chocolate, tropical wood.

Question 10

explain the 4th section of Canadian imports (Low Cost Goods)

Answer 10

• made cheaper in foreign countries
• -labour costs low= lower prices
• –clothing, footwear, plastics, books
• —made in china, india, thailand, mexico

Question 11

Why reduce imports?

Answer 11

Because with imports, the money leaves the city, province or country (Canada)

Question 12

Substitution to importation. What’s an advantage to limiting imports?

Answer 12

Replace foreign produced goods with Canadian made goods.

–it supports Canadian business.

Question 13

Why does Canada have a large amount of exports (regarding natural resources)?

• what do they mainly consist of?
• -where are they often processed?
• –what are the #1, 2, and 3 exports in Canada?

Answer 13

low population and large nation.

• mainly raw materials
• -processed in other countries
• –1) crude oil
• –2) motor vehicles
• –3)metals and alloys

Question 14

Importance of exportation:

Answer 14

Keep economy healthy

• lower prices of Canadian made goods
• -lower number of exports = more unemployment

Question 15

If a product is made in USA, the money would go to or stay in _____

Answer 15

USA

Question 16

What is protectionism

Answer 16

Policy of tariff’s to limit imports

Question 17

What is a tariff

Answer 17

Tax on imports

Question 18

What is the main purpose of tariff’s (in Canada).

-what is a common result of tariffs?

Answer 18

To make it more costly to buy foreign goods

• to give Canadian companies an advantage
• -tariff wars

Question 19

What is free trade

Answer 19

Policy of eliminating tariff’s

–enhance trade among nations

Question 20

What is GATT an acronym for?

• what year was it created?
• what does it do?

Answer 20

General Agreement on Tariff’s and Trade

• created in 1947
• -set of rules governing trade

Question 21

What is WTO

• what does it do
• -what is its primary purpose

Answer 21

World trade organization

• resolves disputes under laws of GATT
• -primary purpose is to open trade for the benefit of all.

Question 22

What is NAFTA?

• what is it
• -What date was it put into effect?
• –what does it do?

Answer 22

North American free trade agreement

• 1993 agreement amount Canada, U.S., and Mexico
• -January 1st 1994
• –phase out (get rid of) tariff’s over a span of 14 years

Question 23

What are the 5 sections of pro’s and con’s of NAFTA/free trade?

Answer 23

1) Efficiency
2) jobs
3) competitiveness
4) environment
5) cultural protection

Question 24

List the 5 sections of pro’s and con’s of NAFTA/free trade and explain the pro and cons of each.

Answer 24

1) Efficiency
In support: helps protect inefficient producers which pushes prices up (helps smaller businesses)
In opposition: not as efficient as cheap foreign (Mexican) ones.
2)Jobs
In support: low skilled jobs replaced with high skill jobs
In opposition: jobs will move to lower wage areas of Mexico & s. U.S.
3) competitiveness
In support: Canada can compete b/c of good transport and cheap power.
In opposition: Canada will have to cut wages and benefits to compete
4) environment
In support: overall quality will improve since Mexico must meet new standards
In opposition: standards in Canada will be relaxed to allow companies to compete
5)cultural protection:
In support: not a threat to Canadian culture
In opposition: if we buy more American, we become more American. Many businesses go out of business

Question 25

Pro’s and cons of NAFTA section 1 (efficiency)

Answer 25

1) Efficiency
In support: helps protect inefficient producers which pushes prices up (helps smaller businesses)
In opposition: not as efficient as cheap foreign (Mexican) ones.

Question 26

Explain pro’s and cons of NAFTA section 2 (jobs)

Answer 26

2)Jobs
In support: low skilled jobs replaced with high skill jobs
In opposition: jobs will move to lower wage areas of Mexico & the U.S.

Question 27

Explain pro’s and cons of NAFTA section 3 (competitiveness)

Answer 27

3) competitiveness
In support: Canada can compete b/c of good transport and cheap power.
In opposition: Canada will have to cut wages and benefits to compete

Question 28

Pro’s and cons of NAFTA section 4, environment

Answer 28

4) environment
In support: overall quality will improve since Mexico must meet new standards
In opposition: standards in Canada will be relaxed to allow companies to compete

Question 29

Pro’s and cons to NAFTA section 5: cultural protection

Answer 29

5)cultural protection:
In support: not a threat to Canadian culture
In opposition: if we buy more American, we become more American. Many businesses go out of business