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petros classes exam review > international business test 1 > Flashcards

international business test 1 Flashcards

1
Q

define domestic + ex

A

a business that operates in between the borders of the same country.
example
- a small tea shop

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2
Q

define international business + ex

A

a business that operates in different countries

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3
Q

define interdependence

A

When two or more people are relent on eachother for survival

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4
Q

define balance of trade

A

difference between a countries exports and imports

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5
Q

define trade surplus

A

exists when a country exports (sells) more than it imports (buys)

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6
Q

trade deficit

A

exists when a country imports (buys) more than it exports (sells)

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7
Q

what is the equation for a trade surplus

A

exports > imports = trade surplus

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8
Q

what is the equation for trade deficit

A

exports < imports = trade deficit

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9
Q

what is CETA

A
  • Comprehensive economic and trade agreement
  • Canada signed a CETA with the european union in 2017 which removed 99 of duties (taxes)
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10
Q

NAFTA

A
  • North american free trade agreement
  • Eliminates all tariff and nontariff barriers of trade between canada us and mexico
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11
Q

USMCA

A
  • United states mexico canada agreement
  • Supports mutually beneficial trade leading to freer markets
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12
Q

advantages of international trade

A
  • Greater access to goods and services (greater variety of products, lower prices, access to larger markets
  • Cultural development (promoted diversity and foster the exchange of cultures)
  • Job creation (creates more jobs for canadians)
  • Increased foreign investments (FDI - foreign direct investment & portfolio investment)
  • New process and technologies (learn new technologies and make contacts)
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13
Q

define foreign direct investment

A

Investment that is located in a different country than the investor to control some or all of the business operations

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14
Q

define portfolio investment

A

When foreign investors purchase stocks, bonds and other financial instruments issued by canadian firms but does not result in foreign control

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15
Q

foreign investment restrictions

A

,

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16
Q

globalization

A

The process whereby national or regional economies and cultures become integrated through new global communication technologies

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17
Q

who’s Canadas largest trading partner

A

Canada’s largest trading partner is the united states

18
Q

name the ways countries can engage in international trade

A
  • Foreign portfolio investments
  • Importing
  • Exporting
  • Listing agreements
  • Franchising
  • Joint ventures
  • Foreign subsidiary
19
Q

define foreign portfolio investment + ex

A

Investing in businesses by purchasing foreign stocks, bonds and other financial instruments
Ex
money markets
Capital markets

20
Q

define importing + ex

A

Bringing products or services into a county for use by another business or for resale
Ex
The majority of the goods that canada imports come from the united states

21
Q

global sourcing + ex

A

The process of buying equipment capital goods, raw materials or services from around the world
- Canada’s top imports include machinery and equipment

22
Q

define exporting + ex

A

Selling goods and services to another country for use by a business or for resale
- The majority of canada’s goods exports to the united states

23
Q

define value added

A

The amount of worth that is added to a product at each stage of processing

24
Q

define licensing agreement

A

Give a company permission to use a product service brand name or patent in exchange for a fee or royalty

25
Q

define franchising

A

An agreement to use a company’s name services products and marketing

26
Q

define joint venture

A

When two businesses one of which is usually located in foreign country from a new company with shared ownership

27
Q

Define foreign subsidiaries

A

When a parent company allows a branch of its company in another country to be run as an independent entity

28
Q

define/ explain trade barriers

A

Measures implemented by governments that make it challenging for foreign business to operate in or trade with the host country
-Protects local businesses generates revenue
- Discourages international trade

29
Q

Define or explain tariffs

A

Taxes or duties put on imported products or services
- Raises the cost of imports so that locally manufactured products are less expensive

30
Q

Define or explain trade quotes

A

A limit on the amount of product that can be imported in certain period of time
- Decreases foreign competition

31
Q

Define or explain standards

A

Exists when countries have different criteria for what is acceptable
- Environmental protection - pushes for fuel efficiency

32
Q

define trade embargoes

A

a ban on trade of a specific product or with a specific country
- In 2003 30 countries embargoed canada beef exports due to mad cow disease

33
Q

define trade sanctions

A

Economic action taken by one country to coerce another to conform to an international agreement or norms of conduct
- Canada does not allow the trading arms with certain countries.
tr

34
Q

define investment Canada act

A

Ensures all foreign investments are reviewed to determine how they will benefit canada

35
Q

define currency speculation

A

Buying,holding or selling foreign currency in anticipation of its value changing
- Investors profit from the fluctuions in its price

36
Q

define floating rate

A

An exchange rate is not fixed in relation to other currencies but changes with respect to other currencies

37
Q

define hard currency

A

Easily converted to tohe currencies
- Issues by a nation seen as politcally and economically stabe
- Widely accepted around the world as a form of payment for goods and services & may be preferred over the domestic currency

38
Q

define soft currencies

A
  • Value fluctuates (predominatly lower) as a result of the countries political or economic uncertinty
  • Believed to be unstable
39
Q

how can a low CAD be good

A

Exporters - can sell more products to exporters because hry are cheaper - benefits our manufacturing sector

Canadian tourism - visit canada more because their country buys more CAD

Canadian retail - makes shopping online or in person in the US more expensive

40
Q

how can a low CAD be bad

A

Importers - more expensive to import and sell products

Canadian travlers - costs more to travel to the us

Major sports team - its harder to pay players because they pay them in USD meaning if the dollar is low its harder to pay the players

41
Q

why is Canadas banking system regarded favourably

A

Larger and have great reserves than american or european competitors
Banking system is tightly regulated by the federal government and designed to handle ups and downs of the business cycle

42
Q
A

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