Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Business Fundamentals > Chapter 5 > Flashcards

Chapter 5 Flashcards

1
Q

What is the total volume of world trade in dollars?

A

Approx 19 trillion $/year

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Define globalization

A

Integration of markets globally

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What type of system is the world becoming

A

Single interdependent

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Define imports

A

Products bought from manufacturers based in other countries to be sold in Canada

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Define exports

A

Products made in Canada bought by consumers in other countries

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What are the major world marketplaces?

A

North America (USA, Canada, Mexico), Europe, Pacific/Asia (Japan, China, India)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Who is Canada’s largest trading partner?

A

USA

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What are the two views in the Europe marktetplace?

A

Traditional (west vs east) and emerging (north vs south)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What are other important and emerging markets? (4)

A

South Korea, Thailand, Indonesia, Ukraine

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is BRICS?

A

Brazil, Russia, India, China, South Africa (trading partners)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Define absolute advantage

A

Country producing something more efficiently than any other country

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Define comparative advantage

A

Country producing specific item more efficiently (cheaper) than other items it produces

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What does the Theory of National Competitive Advantage focus on (7)

A

Factor conditions; demand conditions; related and supporting industries; strategies, structure, rivalries

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Define balance of trade

A

Difference in value between total exports and total imports

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Define trade surplus

A

Nation exports more than it imports

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Define trade deficit

A

Nation imports more than it exports

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Define balance of payments

A

Flow of money in/out of country

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What brings cash flow in?

A

Exports; foreign tourist spending in the country; foreign investments in the country; earnings from investments outside of the country

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What brings cash flow out?

A

Imports; country citizens spending more overseas (tourists); foreign aid grants; military spending abroad; country investing abroad; earnings from foreign investments in the country

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Define foreign exchange rate

A

Ratio of one currency to another

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Define a “strong” dollar

A

High demand for both $$ and products

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

When does the value of the dollar depreciate?

A

Exports increase while imports cost more

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

When does the value of the dollar appreciate?

A

Exports decrease while imports cost less

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

What questions should be asked to determine if an enterprise should go international? (4)

A
  1. Is there international demand?
  2. Can product be modified to fit foreign market?
  3. Is foreign business climate suited to imports?
  4. Does firm have/can get necessary skills and knowledge to do business?
25
Q

Define an exporter

A

Making products in one country and selling to others

26
Q

Define an importer

A

Buying products in foreign markets to resell in home country

27
Q

Define an international firm

A

Conducting most business abroad (domestic firm with international operations)

28
Q

Define a multinational firm

A

Controlling assets, factories, mines, sales offices, affiliates in 2+ foreign countries; planning, decision making geared towards international markets

29
Q

What is the international organization structure? (5)

A

Importing/exporting via independent agent -> licensing arrangement -> establishing branch office -> choosing strategic alliance -> foreign direct investment

30
Q

Why have an independent agent?

A

Local indiv./org. representing exporter’s interests; often selling products, collecting payments, ensuring customer satisfaction; understands language, culture, market

31
Q

Why create a licensing arrangement?

A

Exporter gives a foreign company the exclusive right to manufacture or sell its product for a royalty or fee; franchising is a special form of a licensing arrangement

32
Q

Why build a branch office? (4)

A

Established in foreign country
Increased sales due to local presence
More direct control
May be a foreign legal requirement

33
Q

Why form a strategic alliance (3)

A

May be mandated in some nations
Get knowledge and expertise of the foreign partner
Greater control

34
Q

Why choose FDI

A

Companies buy or establish tangible assets in a foreign country (location benefits)
Brings foreign investment to local economy
Provides local employment

35
Q

What are the barriers to international trade?

A

Social and cultural differences
Economic differences
Legal and Political Differences

36
Q

What are examples of social, cultural differences? (5)

A

Language
Population demographics
Religious differences
Social beliefs
Shopping habits

37
Q

What are examples of economic differences? (5)

A

the role of government in the economy
planned vs. market economies
capitalist
socialist
communist

38
Q

What are legal and political differences? (6)

A

Quotas, tarrifs, subsidy, protectionism, local content laws, business practices

39
Q

Define quotas

A

limitations on importation of a product class
embargo-forbidding export/import from a nation
United States v s. Cuba

40
Q

Define tarrifs

A

a tax on imported goods
raises government revenues as well

41
Q

Define subsidy

A

government financial assistance for domestic firms

42
Q

Define protectionism

A

protects local business at the expense of free market competition

43
Q

Define local content laws

A

requires that at least part of the product be made in the foreign country (possible joint venture)

44
Q

Define business practices (3)

A

Bribes
Dumping
Cartels

45
Q

Define bribes

A

seen as “gratuities” to officials in some nations

46
Q

Define dumping

A

selling goods abroad for less than a firm charges at home; illegal in most nations

47
Q

Define cartels

A

associations of producers created to control supply and demand (e.g., O P E C)

48
Q

Define GATT

A

General Agreement on Tarrifs and Trades

49
Q

Define WTO

A

World Trade Org; 153 member nations, negotiate trade agreements, resolve trade disputes

50
Q

Define EU

A

European Union; largest free marketplace in the world, 27 countries, Brexit (UK left in 2020), eliminates quotas, sets uniform tarrifs within unions

51
Q

Define NAFTA

A

North American Free Trade Agreement; as of 1994, removes tarrifs/trade barriers between 3 countries

52
Q

Define USMCA

A

US Mexico Canada Agreement; sept 30 2019; replaces NAFTA; opens 3.59% of Canadian dairy market to US; car content must originate 75% from North America

53
Q

How are the GATT and WTO related

A

WTO came after GATT and is more powerful

54
Q

Are people for or against trade liberalization

A

Against

55
Q

What characterizes the opponents of free trade?

A

Job loss; market flooded with goods made in Mexico; loss of control over enviro. standards, natural resources, Canadian cultural sovereignty

56
Q

What characterizes the supporters of free trade?

A

Access to US market; more exports, therefore more jobs; no threat to enviro., natural resources, cultural sovereignty

57
Q

What are the 2 new major agreements in the works

A

CPTPP, CETA

58
Q

Define CPTPP

A

Comprehensive and Progressive Agreement for TransPacific Partnership; 12 countries: Canada, Australia, Brunei Darussalam, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, US (who leaves in 2016)

59
Q

Define CETA

A

Canada-European Union Comprehensive Economic and Trade Agreement; 27 Eu members (1/2 billion people), 98% of Canadian goods become duty free in EU, up from 25%

Business Fundamentals (15 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions