International Business UNIT #1

Question 1

Interdependence vs. self-sufficiency

Answer 1

Interdependence: The reliance of two or more groups on the actions of one another to fulfill certain wants or needs.
Self-sufficiency: The ability to provide for all of your basic needs, such as food, clothing, shelter, and water without relying on anyone else.

Question 2

Primary, secondary, and tertiary industries

Answer 2

Primary: The extraction and initial processing of raw materials. Includes: Agriculture, fishing, hunting and trapping, forestry and logging, energy and mining.
Secondary: made up of primary manufacturing and secondary manufacturing> Produces both capital goods(machinery and heavy equipment) and consumer goods(clothing, packaged food).
Tertiary: Provide necessary services to other businesses and consumers. Service sector. Ex: banking, communications, construction and transportation.

Question 3

Imports vs exports

Answer 3

Imports: Goods and services produced in one country and brought into another country for sale.
Exports: Goods and services produced in one country and sold to another country.

Question 4

Trade surplus vs trade deficit

Answer 4

Trade surplus: This is when a country’s exports are greater than their imports.
This means that more jobs are being provided domestically which can lead to higher employment, income and spending.
Trade Deficit: This is when a country’s imports are greater than their exports.
You are not producing as much within your own country and you need to bring in goods/services from other countries.

Question 5

Protectionism/Trade barriers(TTTTSFE)

Answer 5

Tariffs: Taxes or duties put on imported products or services.
Trade quotas: Government imposed limit on the amount of product that can be imported in a certain time period.
Trade embargos: Imposed by government, bans trade on a specific product or with a specific country.
Trade sanctions: Done to influence the policies or actions of other nations such as: Human rights issues, War or revolution, Terrorism, Slavery, Piracy, Smuggling
Safety Regulations: Government regulates and administers commerce and trade in specific goods under many acts..
Foreign investment restrictions: Ensure that all foreign investments are reviewed to determine how they will benefit Canada.
Environmental restrictions: Import restrictions are in place to protect Canadian crops and livestock, fish, and animals.

Question 6

Trade in the modern world/ways a company can enter into a foreign market(LEFJF)

Answer 6

Licensing agreement: Agreement that allows a company to use there name/ liscnecing on there product.
Exclusive distribution rights: only allowing certain people to distribute the product you manufacture
Franchising: Uses the name of a franchise, uses their prodcuts and methods
Joint venture: Two companies join together and pool their resources to accomplish a task
Foreign subsidiary: Company operating in one country that is owned by a parent company operating in another country

Question 7

Currency exchange rate

Answer 7

Is the amount of currency in relation to the currency of another country.

Question 8

Floating exchange rate

Answer 8

The exchange rate is affected by the supply and demand for Canadian dollars in international exchange markets.
If demand exceeds supply, the value of the dollar will go up.
If the supply exceeds demand, its value will go down.