Lecture 3 Flashcards
What is globalization
the integration of markets globally
A single interdependent system
What are imports
products purchased in Canada that are manufactured in other countries
What are exports
products made in canada that are purhased by consumers in other countries
what is absolute advantage
a country can produce something more effeciently than any other country
What is comparative advantage
a country can produce certain items more efficiently than it can other items
What are 4 conditions the theory of national competitive advantage focuses on
- Factor conditions
- Demand Conditions
- Related and Supporting Industries
- Strategies, structure, and rivalries
What is balance of trade
the difference in value between total exports and total imports
What is trade surplus
when the nation exports more than it imports
What is trade deficit
when the nation imports more than it exports
What is balance of payments
the flow of money into or out of a country
What is foreign exchange rate
ratio of one currency to another
When the value of the canadian dollar depreciates, exports _______ and imports ________
Exports increase and imports cost more
When the value of the canadian dollar appreciates, exports _______ and imports ______
Exports decrease and imports cost less
What are the 4 questions a business must pass for to know if it should go international or not
- Is there international demand for the firms product?
- Can the firm be modified to fit a foreign market?
- Is the foreign business climate suited to imports?
- Does the firm have or can it get the necessary skills and knowledge to do business?
What is an Importer business
buys products in a foreign markets for resale at home
