Chapter 1 Flashcards
Business
Manufacturing and/or sale of goods and/or services to satisfy the wants and needs of consumers to make a profit
Transaction
Exchange of things of value
Domestic business
Business transactions within the borders of one country
International business
Transactions conducted between businesses located in different countries
Domestic market
All your customers live in the country where your business operates
Foreign market
All the customers are in a country other than your own
5 ways to internationalize a business
- Own a retail of distribution outlet in another country
- Own a manufacturing plant in another country
- Export to business in another country
- Import from business to another country
- Invest in business in another country
The Middle East
- oil centred = not sustainable
- political instability & lack of industrialization limit trade
- United Arab Emirates trade w/ Canada (not oil)
India
- pop over 1 billion
- growing middle class
workforce= young / well educated - major centre of outsourcing and manufacturing
- lack of infrastructure & widespread corruption
- companies aggressively expanding into international markets
Africa
- low imports to Canada
- unstable government, lack of infrastructure, rural economies = limited business opportunities
- rich in primary resources
- Morocco, South Africa = trade partners
Globalization
Process whereby national or regional economies and cultures have become integrated
Interdependence
The reliance of two or more nations on each other for products or services.
3 main areas of interdependence
- Primary industries
- Secondary
- Tertiary
Primary industries
Natural resources
5 major primary industries
- Agriculture
- Fishing/ hunting/ trapping
- Forestry/ logging
- Energy
- Mining
(Water sometimes included in Canada)
Secondary industries
Create a finished usable product
Products purchased my business
Capital goods
Products purchased my individuals
Consumer goods
Branch plant
A factory owned by a company based in another country
Canadas economy =
Branch plant as many businesses are owned by foreign investors
Tertiary industries
Provide necessary services to consumers and other businesses
Ex. Banking
The internet
- primary tool for businesses and consumers to buy and sell
- transformed the world into an open market place
How do international businesses help Canada (4 ways)
- variety of products
- new markets = more jobs
- foreign investments
- new processes & technologies
How does international business hurt Canadians
Loss of cultural identity
5 negative impacts of increased foreign ownership of companies in Canada
- Foreign companies have foreign loyalties
- Lack of research and development
- Reduced exports
- Revenues leave Canada to pay head office costs
- Economic destabilization
Why is eating local better
- grows the domestic economy
- saves nutritional value
- better for the environment
Why is buying food from other countries cheaper?
Labour is cheaper
Pros of foreign investment
- help Canadian firms expand and enter foreign markets
When did Columbus come to Canada?
1600s
When and where were trade settlements established
Halifax. Montreal. Quebec. Ottawa. Kingston. Toronto. 1700s
Why does Canada have stronger ties w/ Britain than France?
Britain won the seven years war w/ France therefore Canada traded more with England than France
When did the us gain independence
Late 1700s
Us industrial revolution
- 1775 James watt = steam engine
- 1794 Eli Whitney = Cotton gin
What did Canada supply to the us
Wheat and timber
Why is us bigger than Canada
US = manufacturing - more jobs - dependant Can = resource based trading- dependant on Britain
Why are manufacturing jobs decreasing in us and can
Cheaper labour and improved technology = more economical to manufacture in Asia
When did Canada start trading with japan
Late 1940s
What is japan known for
Automobiles and high-tech equipment
What led to free enterprise promoted in several Chinese districts?
Liberalization of communist economic policies
2/3 Chinese exports are foreign owned or invested why?
Because labour is cheap and abundant in china
When was NAFTA signed
1993
What spurred North America / Mexico trade
NAFTA
North American free trade agreement
What is NAFTA
Good made in Mexico or the US can enter Canada duty free.
-Mexican goods = bargain
Duty
A tax most countries place on imports to make the price of domestic goods competitive with imported goods
