Chapter 5 Flashcards
1
Q
Globalization
A
the movement of goods, services, technology, investment, ideas, and people throughout the world
2
Q
positive effects of gobalization (7)
A
- outsourcing
- lower prices
- improved human rights
- increased productivity
- innovation
- better jobs
- increased capital flow
3
Q
negative effects of globalization (9)
A
- lost canadian jobs
- fear of job loss
- loss of canadian productivity
- exploitation of cheap labour
- increased pollution
- unhealthy products
- spread of disease
- increase in the income gap
- influence of multinational corporations on governments
4
Q
companies use three major types of globalization strategies
A
- global strategy
- multidomestic strategy
- transnational strategy
5
Q
global strategy (4)
A
- regards the world as one big market. all people want the same product and will respond to marketing in a similar way
- products and marketing are around the world
- takes advantage of economies of scale (proportionate savings gained by producing larger quantities)
- does not respond to individual cultures
6
Q
multidomestic strategy (3)
A
- customizes products, services, and marketing, for the local culture - local management is most capable of determining that is best for the local subsidiary
- effective when cultural differences are prominent
- less political and exchange rate risk
7
Q
transnational strategy (3)
A
- combines the best elements of the global and multidomestic strategies
- Respects needs of local market, while maintaining efficiencies of a global strategy
- manufacturing takes place at least expensive source, human resources and marketing take place at the local level
8
Q
trade agreement (2)
A
- An enforceable treaty between two countries that involves the movement of goods and services, elimination of trade barriers, establishment of terms of trade, and ecouragement of foreign investment
- Agreements may be multilateral (3+ parties) or bilateral (2 parties)
9
Q
NAFTA (4)
A
- january 1994 between canada, us, mexico
- created world’s largest free trade area
- sets rules surrounding movement of goods, services, and invrstments across North America
- Eliminates tariffs and other trade barriers, and promotes fair competition
10
Q
advantages of nafta (3)
A
- has helped create higher paying jobs in education, engineering, and banking sectors in Canads
- allows freer flow of goods and services across north america, providing better access to raw materials, talent, capital, and technology
- trade has tripled between the three members since NAFTA’s inception
11
Q
disadvantages of NAFTA (3)
A
- Manufacturing jobs have been lost to Mexico, where labour costs are lower
- without tariffs, many Mexican farmers could not compete and lost their livelihoods
- canadian companies sold to foreign investors
12
Q
Tax Treaties
A
Created to prevent double taxation and tax evasion for people who would pay taxes in Canada and another country. The treaty determines how much tax each country can collect
13
Q
the EU
A
- trade agreement signed in 1993
- encompasses 27 countries in europe
14
Q
euro
A
european currency unit adopted by the european union and used in most european countries
15
Q
trade organizations
A
groups established to help with free flow of goods and services
-created by individual governments to help domestic companies expand
16
Q
WTO
A
an international otganization, 1995, promotes trade liberalization throughout the world
17
Q
wto purposes (3)
A
- act as a forum for negotiations
- to provide a set of rules that have been negotiated and signed by the governments of member countries
- offer a forum for dispute settlement
18
Q
apec
A
- trade organization created in 1989 that unites twenty one of the countries surroundimg the pacific ocean
- foster open and free trade among its members, increase prosperity and economic growth, and develop the asia pacific community
19
Q
g8
A
- trade organization
- meet to discuss macroeconomics
- issues such as economic growth, trade liberalization, and helping developing countries
20
Q
g20
A
- trade organization 1990s
- discussion forum for the major economies of the world
21
Q
g20 focuses (4)
A
- economic and employment growth
- elimination of trade barriers
- reforming financisl institutions and regulations
- restructuring global financial organizations
22
Q
canadas place in the g8 and g20
A
- canadas gdp and population are low compared to other countries
- replacing canada in the g8 and put as a second tier country in the g20 would be detrimental due to less consideration for our needs
23
Q
organization for economic cooperation and development (OECD)
A
- trade organization with 30 members, 1961
- promotes advsncement of democracy and market economies
- eliminates bribery, money laundering, and fraud, and to create a code of conduct for multinational companies
24
Q
world bank
A
- organization with 186 members
- provides loans and grants to assist with education, health, infrastructure, farming, environmental issues, resource management, and other economic concerns
25
international monetary fund (imf) (4)
- purpose is to promote financial stability, prevent and solve economic crises, encourage growth, and assuage poverty
- accomplishes by:
- encouraging countries to adopt responsible policies
- lending money to emerging and developing countries
- providing technial training in areas such as banking regulations and exchange rate policies
26
un purposes (4)
- keep peace
- develop friendly relations
- work together to help poor people live better lives
- be a centre for helping nations to achieve these goals
27
functions of the un (3)
- reponsible for organizatioms that influence international business (eg ilo imf and world bank)
- devotes resources to improve standard of living, unemployment rate, and economic conditions throughout the world
- un economic and financial comittee deals with issues such as international trade, globalization, and poverty elimination
