Chapter 5

Question 1

Globalization

Answer 1

The movement of goods, services, technology, investments, ideas, and people through the world

Question 2

7 positive effects of globalization

Answer 2

1. Outsourcing
2. Lower prices
3. Improved human rights
4. Increased productivity
5. Innovation
6. Better jobs
7. Increased capital flow

Question 3

Negative effects of globalization

Answer 3

1. Lost Canadian jobs
2. Fear of job loss
3. Loss of Canadian productivity
4. Exploitation of cheap labour
5. Increased pollution
6. Unhealthy products
7. Spread of disease
8. Increase in the income gap
9. Influence of multinational corporations in government

Question 4

3 globalization strategies

Answer 4

1. Global strategy
2. Multidomestic strategy
3. Transnational strategy

Question 5

Global strategy

Answer 5

• world = one big market
  ( all people want the same product and will respond to marketing similarly)
• products/ marketing = uniform
• takes advantage of economic sale
  ( savings gained by producing larger quantities)
• does not respond to individual cultures

Question 6

Multidoemstic

Answer 6

• customizes products, services, and marketing for local culture
• local management is most capable of determining what if best for local subsidiary
• effective when cultural differences are prominent
• less political and exchange rate risk

Question 7

Transnational strategy

Answer 7

• best elements of global and multi domestic strategies
• respects needs of local markets
• maintains efficiencies of global strategy
• manufacturing takes place at least expensive source
• marketing and human resources take place at the local level

Question 8

Trade agreement

Answer 8

An enforceable treaty between two or more countries that involves the movement of goods and services, elimination of trade barriers, establishment of terms of trade, and encouragement of foreign investment

Question 9

Multilateral agreements

Answer 9

3 or more countries

Question 10

Bilateral agreements

Answer 10

2 countries

Question 11

NAFTA

Answer 11

• January 1994
• Canada, US, Mexico
• largest free trade area
• sets rules surrounding movement of goods, services, and investments across North America
• eliminates tariffs and other trade barriers and promotes fair competition

Question 12

Advantages of NAFTA

Answer 12

1. helped create higher paying jobs in education, engineering and banking sectors in Canada
2. Allows free flow of goods and services across North America, providing better access to raw materials, talent, capital and technology
3. Trade has tripled between the 3 countries

Question 13

Disadvantage of NAFTA

Answer 13

1. Manufacturing jobs have been lost to Mexico, where labour costs are lower
2. Without tariffs many Mexican farmer could not compete and lost their livelihoods
3. Canadian companies sold to foreign investors
4. Maquiladoras = - us factories - takes advantage of Mexicans

Question 14

Tax treaties

Answer 14

Created to prevent double taxation and tax evasion for people who would play taxes in Canada and another country. The treaty determines how much tax each country can collect

Question 15

European Union

Answer 15

• trade agreement
• signed in 1993
• now - 27 countries Europe
• population = almost half a billion
• own flag, anthem, currency, and common financial, security and foreign policies

Question 16

The euro

Answer 16

The European currency adopted by the European Union and used in most eu countries

Question 17

Trade organizations

Answer 17

Hell with the free flow of goods and services. They may be global in scope or national organizations created by individual governments to help domestic companies expand into international markets

Question 18

World trade organization

Answer 18

WTO 
An international organization
- established in 1995 
- now over 150 members 
- promotes trade liberalization throughout the world

Question 19

Purpose of WTO

Answer 19

• to acts as a forum for negotiations
• to provide a set of rules that have been negotiated and signed by the government of member countries
• to offer a forum a dispute settlement

Question 20

Asia-Pacific economic co-operation

Answer 20

APEC

• trade organization
• created in 1989
• 21 counties surrounding Pacific Ocean
• co-operate on regional trade

Question 21

Goals of APEC

Answer 21

• foster and open free trade among members
• increase prosperity
• economic growth
• develop the Asia- Pacific community

Question 22

The group of eight

Answer 22

G8

• trade organization
• major economies of the world
• meet to discuss macroeconomic issues (growth, trade liberalization and helping developing countries

Question 23

G8 members

Answer 23

France 
United States 
Canada 
Great Britain 
Italy 
Germany 
Japan 
Russia

Question 24

G20

Answer 24

• trade organization
• established during the economic crisis of the 1990s
• provides a discussion forum for the major economies of the world beyond the G8

Question 25

Focus of the G20

Answer 25

1. Economic and employment growth
2. Elimination of trade barriers
3. Reforming financial institutions and regulations
4. Restructuring global and financial organizations

Question 26

Canadas place in the G8 and G20

Answer 26

• Canadas GDP and populations = low compared to other G8 and G20 countries
• talk of replacing Canada in the G8 and placing it as a second tier country in the G20
• • would bee detrimental to Canada as its needs, concerns, and interests would not be given the same consideration

Question 27

Organization for economic co-operation and development (OECD)

Answer 27

• trade organization
• 30 members
• established 1961
• promotes the advancement of democracy and market economies
• members work together to eliminate bribery, money laundering, and fraud, and to create a code of conduct for multinational companies

Question 28

The world bank

Answer 28

• 186 member countries
• provide monetary and technical support for developing countries
• (provides loans and grants to assist with education, health, infrastructure, farming, environmental issues, resource management, and other economic concerns)

Question 29

International Monetary Fund

Answer 29

IMF

- purpose = to promote financial stability, prevent and solve economic crisis, encourage growth, and assuage poverty

Question 30

How does IMF fulfill its purpose

Answer 30

1. Encourage countries to adopt responsible economic policies
2. Lending money to emerging and developing countries
3. Providing technical training in areas such as banking regulations and exchange rate policies

Question 31

Four main purposes of the un

Answer 31

1. To keep peace through the world
2. To develop friendly relationships between nations
3. To work together to help poor people live better live (to conquer hunger, disease, and illiteracy, and to encourage respect for each other’s rights and freedoms
4. To be a centre for helping nations to achieve these goals

Question 32

Uns 3 main functions

Answer 32

1. Responsible for organizations that influence international business, including, the international Labour organization, (ILO), the International Monetary Fund, and the world bank
2. Devotes resources to improving the standard of living, the unemployment rate, and economic conditions
   throughout the world
3. Economic and financial committee deals with issues such as international trade, globalization, and poverty elimination