final test review Flashcards
what isa domestic transaction?
Selling of items that are produced in the same country
what is an international transaction
Selling of items that are produced in another country
what does international transactions include?
creating,shipping,selling goods and services across national borders
what is the global economy?
the exchange of goods and services among people in different countries throughout the world
benefits of doing business internationally
- access to markets
- cheaper labour
- increased quality of goods
- increased quantity
- access to resources
what are the five P’s of internatioal business
- product
2.price - proximity
- preference
5 promotion
what are the social costs associated with international trade
- offshore outsourcing
- human rights issues and labour abuses
- environmental degradation and sustainable development
what is offshore outsourcing
practice of subcontracting work to other companies to lower costs or to focus on tasks done better
what are human rights and labour issues
workers in other countries often face a wide range of abuses in the workplace (labour exploration, physical and sexual abuse, lack of health and safety etc)
what is environmental degradation
environment degradation is the consumption of natural resources such as trees, water, earth, habitat and air, faster that nature can replenish them
what is sustainable development
the process of developing land, cities, and businesses that meets the present needs without it compromising future generations
why does the canadian gov’t use barriers/roadblocks?
to protect domestic business and consumers
what is a tariff
a form of tax on certain types of imports
what is a non- tariff barriers
standards for the quality of imported goods can be set so high that competitors can’t enter market
what are excise taxes
taxes on the manufacture, sale or consumption of a particular product within a country.
They put high taxes
To control behaviour
what are currency fluctuations
an international purchase made one day may cost less or more than another purchase on the following day
what is the balance of trade
countries try to import the same total value of products that they export. an imbalance of the two results in the following
what is trade deficit
imports exceed exports
what is trade surplus
exports exceed imports
5 ways to offset the risk of importing
- gauge consumer interest
- choose foreign suppliers carefully
- learn about the culture to will be dealing with
- consider purchase agreements carefully before signing
- when the goods arrive, check them carefully to ensure everything you ordered is there and in good condition
what is direct exporting
the exporter deals with directly with the importer
what is indirect exporting
the goods move from the exporter to an intermediary and then on to the importer
who is canada’s number one trade partner
United States
three major reasons for trading with the US include
- shipping costs are cheaper for nearby locations
- have similar interests, tastes and speaks the same language
- larger pop. gives canadiaans access to a larger market
two main advantages to reducing trade barriers
- domestic business can sell their products abroad at lower prices since duties are not added
- consumers have access to new foreign products that may result in lower costs and qualityy improvement of domestic products
ex. of trade agreements
World Trade Organization
North American Free Trade Agreement
what is a bilateral agreement
involve canada and another country (have bilateral agreements with Chile and Isreal)
what is a trading Bloc
a group of countries sharing the same trading interests
what is EU
European Union- the union of many european countries into a single market. use the euro and have neglected government
impact of cultural differences
Culture can be learned
operatin in different cultures require research etc
Law of demand
As the price goes up the consumer buys less.
Law of supply
As the prices go up the suppliers want to supply more
Factors that effect the law of demand
- Change in expectation in the future
- Change in consumer income
- Change in consumer taste
What affects the law of supply
Change in number of producers
Change in number of sellers in the market
Changes in technology
What are ethics
Rules that tell you the difference between right and wrong
Fraud
Crime of lying or pretending
Insider trading
Buying and selling shares base on confidential information
Cooperate social responsiblity
Being responsible towards your customers, employees and communities ( no discrimination, fair labour practices, truthful in advertising)
What is fair trade
Eliminate the middle man
what is the world trade organization
only organization that deals with the rules of trade between nations
what is NAFTA
agreement signed by mexico, canada and the US, creating a trilateral rules based trade bloc in north america
