chapter 3 lists Flashcards
what are the 5 pros of free trade?
more potential in the global market
productivity improves when a country has a comparative advantage in production
less costly imports keeps prices down
free trade inspires innovation and competition for firms
helps keep interest rates low
what are the 4 cons to free trade?
domestic workers can lose their jobs
workers may be forced to take pay cuts
moving operations overseas will mean loss of service and white collar jobs
domestic companies can lose comparative advantages
what are the six strategies for reaching global markets?
licensing
exporting
franchising
contrat manufacturing
International joint ventures
foreign direct investment (FDI)
what are 4 benefits to a joint venture?
shared technology
shared risk
shared marketing and management
entry into new markets
what are the 3 ways government regulate the import of goods and services?
tariffs
quotas
regulations
what are the two kinds of tariffs?
revenue tariffs
protective tariffs
what are 3 different kinds of non tariff barriers?
import quotas
voluntary export restraints
domestic regulations
what are 7 reasons to implement trade barriers/ trade protectionism?
stimulate domestic employment
foster infant industries
improve a countries terms of trade
protect a countries environmental and safety standards
protect domestic workers from imports produced with cheap foreign labour
national security
cultural sovereignty
what is CUSMA 6 objectives?
eliminate trade barriers and facilitate cross-border trade
promote conditions of fair competition in this free trade area
increase investment opportunities in the territories of the three nations
provide effective protection of intellectual property rights in each others nation
establish a framework for further regional trade cooperation
improve working condition in north america
what is the theory of comparative advantage?
the benefit enjoyed by a producer who can supply a certain item with a lower opportunity cost than other producers
what is the absolute advantage?
the benefits enjoyed by a producer who can supply a certain quantity of an item more efficiently than other producers
what is dumping mean in international trade?
selling a product for cheaper in foreign markets than at home
what Is trade protectionism?
using government regulations to keep foreign goods out
what is licensing?
a firm (licensor) will licence the right to manufacture its product or use its trademark to a foreign company (licensee) for a fee (royalty)
what is franchising?
an arrangement where someone with a good business idea sells the rights to use the business name and sell the product to a given territory
