IB CH 2 Flashcards
Protectionism
The theory or practice of shielding domestic industries from foreign competition, often through trade barriers such as tariffs.
Trade quotas
A government-imposed limit on the amount of product that can be imported in a certain period of time.
Trade embargo
A government-imposed ban on trade of a specific product or with a specific country, often declared to pressure foreign governments to change their policies.
Trade sanctions
Economic action taken by a country to coerce another to conform to an international agreement or norms of conduct.
Which two countries are the largest trading partners in the world
The U.S. and Canada
Exchange rate
The amount of one country’s currency in relation to the currency of another country.
Standards
Countries have different standards for products in areas such as environmental protection, voltage, and health and safety
The ISO (International Organization for Standardization) is a network of standardization groups from over 170 countries established to set quality regulations
Foreign investment restrictions
Canadian law with the greatest impact is the Investments Canada Act
Ensures that all foreign investments are reviewed to determine how they will benefit Canada
Losers of a High Canadian Dollar
Exporters
Canadian tourism
Canadian retailers
Winners of a High Canadian Dollar
Importers
Canadian travellers
Major league sports teams in Canada©iStockphoto.com
Floating Rate
An exchange rate that is not fixed in relation to other currencies. The price at which currency with a floating rate is bought and sold fluctuates according to supply and demand.
Currency devaluation
The increase in value of a currency because the demand for that particular currency is greater than the supply
Currency revaluation
The increase in value of a currency because the demand for that particular currency is greater than the supply
Joint venture
A common type of international business, in which a new company with shared ownership is formed by two businesses, one of which is usually located in the country where the new company is established.
Franchise
An agreement granted to an individual or group by a company to use that company’s name, services, products, and marketing. For a fee, the franchisor provides support to the franchisee in the areas of financing, operations, human resources, marketing, advertising, quality control, etc.
Who are Canada’s major trading partners
United States, European Union and China
Exporting
To send goods or services to another country, for use by a business or for resale
Licensing agreement
An agreement that grants permission to a company to use a product, service, brand name, or patent in exchange for a fee or royalty
Exclusive distribution rights
A form of licensing agreement that grants a company the right to be the only distributor of a product in a specific geographic area or country.
Foreign subsidiaries
Often referred to as a wholly owned subsidiary, a branch of a company that is run as an independent entity in a country outside of the one in which the parent company is located. The parent company often sets financial targets, and allows the subsidiary to manage its own day-to-day operations as long as those targets are being met.
Tariffs
Tariffs, the most common type of trade barrier, are taxes or duties put on imported products or services. Tariffs raise the cost of imports, so that locally manufactured products are less expensive and more appealing to consumers.
Describe the impact technology has had on the international business environment
Communication technology allows the world of international business to operate twenty-four hours a day
Certain methods of communication can be used at any time (email); other methods (telephone) require knowledge of time zones
Some methods offer immediate feedback and interaction; others do not
