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COMM 101 > Module 1: Part 1.C: International - Exploring Global Business > Flashcards

Module 1: Part 1.C: International - Exploring Global Business Flashcards

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1
Q

United Nations World Population Estimates

A

At high point up to over 50 billion people by 2100

At the low level about 6 billion (less than today)

Average is 9 billion expect to see the world

Can created a shrinking or rapidly growing market

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2
Q

Importance of Global Business to Canada

A
  • Economies of scale in production and marketing.
  • Ease of transfer of experience, technology. -when companies invest in canada or abroad
  • Global recognition of products and brand names.
  • Possibility of uniform global image for the companies.
  • Enhances the quality of Canadian life
  • Canada exports approximately 45% of what it produces (20% of all jobs) -consume just over ½ we make
  • Approximately 1/5 of all jobs in Canada are related to international trade
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3
Q

Canadian Trade

A

Canada largest importing partner with the US, majority what we import is from the US

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4
Q

Why Do Countries Trade?

A
  • No one country can produce all the products that its people want and need.
  • Nations who cannot produce what they want and need will want to trade with countries who can and have a surplus (ex. fruit in Canada).
  • Some countries have an abundance of natural resources but lack the technological knowhow to retrieve them. (in canada have developed tech thankfully)
  • Other countries have the technology but lack the natural resources. (like Europe lots of tech but lack resources- or used up natural resources)
  • Example:
  • Russia: abundant natural resources but low-tech
  • Taiwan: high-tech but minimal natural resources
  • Free trade is the movement of goods and services among nations without political or economic trade barriers (orgs. And treaties that help fair trade between countries)
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5
Q

Why Nations Trade

A
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6
Q

Absolute Advantage

A
  • the ability to produce a specific product more efficiently than any other nation
  • Or, a country is the only provider of a product
    -ex. Saudi arabia lots of oil- is of lesser cost to extract and deliver to market
    -ex. US ; apple, microsoft- tech advantages
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7
Q

Comparative Advantage

A
  • the ability to produce a specific product more efficiently than any other product
  • The concept that a country should specialize in the products that it can produce most readily and cheaply, and trade these for goods that foreign countries can produce most readily and cheaply
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8
Q

The Global Marketplace
Why “Go Global?”

A

-Earn additional profits (more revenues or cost savings)

-Potential for cost savings

-Possess exclusive market information

-Leverage a unique product or technological advantage

-Saturated domestic markets and excess capacity (so much competition must move elsewhere to make profit)

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9
Q

International Trade Key Terms

A

Exports
Imports
Balance of Trade
Trade Surplus
Trade Deficit
Balance of Payments

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10
Q

Exports

A

Goods and services made in one country and sold to others [exported from one country to another]

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11
Q

Imports

A

Goods and services that are bought from other countries [bought from other countries]

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12
Q

Balance of Trade:

A

The difference between the value of a country’s exports and the value of its imports during a certain time

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13
Q

Trade Surplus

A

A favourable balance of trade that occurs when a country exports more than it imports

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14
Q

Trade Deficit

A

An unfavourable balance of trade that occurs when a country imports more than it exports [canada is increasing here in recent years- more money flowing out of canada
- than in = negative balance of payments] -positive balance when exporting more

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15
Q

Balance of Payments

A

The difference between money coming into the country and money leaving the country

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16
Q

Currency Valuations

A
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17
Q

Currency exchange rate:

A

Value of one currency in relation to another

-Economic factors impact exchange-rate fluctuations
-Interest rates
-Inflation and economic strength
-Balance of trade and trade flow

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18
Q

The Global Marketplace

A

Exporting
Licensing
Contract Manufacturing
Joint Ventures
Direct Foreign Investment

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19
Q

Exporting

A

Sell domestically produced goods to buyers in other countries

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20
Q

Licensing

A

The legal process allowing a company use a manufacturing process, franchise, trademark, patent, trade secret, or knowledge [allow company to licence product how to make product to local manufacturer and pay a fee]

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21
Q

Contract Manufacturing

A

A foreign company manufacturers private label goods under a domestic company’s brand [banglasdesh -lots of clothing/textiles -like joe fresh]

22
Q

Joint Ventures

A

Two or more businesses combine for a specific project or business venture

23
Q

Direct Foreign Investment

A

Active ownership of a foreign company/manufacturing/marketing facility [from foreign sources]

24
Q

Fostering Global Trade

A

Antidumping laws
World Trade Organization (WTO)
World Bank
International Monetary Fund (IMF)

25
Q

What are antidumping laws?

A

Regulations to prevent countries from selling surplus goods at unfairly low prices that harm local markets.

26
Q

What is the role of the World Trade Organization (WTO)?

A

To arbitrate trade disputes between countries and promote free trade.

[arbitrate between countries with disputes]

27
Q

What does the World Bank do?

A

Funds infrastructure projects in developing countries using money from wealthier nations.

[funds infrastructure for countries, wealthy countries provide money here to bank and bank lends it to develop other countries

28
Q

How does the International Monetary Fund (IMF) assist countries?

A

Provides short-term loans to countries facing financial instability.

[sister to world bank- stable countries contribute- unstable look her for short term loans]

29
Q

International Economic Communities
Economic Community

A

Organization of countries formed to promote free movement of resources and products among member nations (also referred to as regional economic integration) -create freer movement of resources/goods

Also known as economic integration:
* European Union (EU)
* United States-Mexico-Canada Agreement (USMCA)
* Asia-Pacific Economic Cooperation (APEC)

30
Q

Goals of Economic Communities

A

-Reduce trade barriers

-Increase flow of international trade

-Promote peaceful relationships between countries

-Provide increased prosperity for the citizens of each member country

31
Q

Barriers to International Trade

A

Political Considerations
Economic Environment
Natural Barriers

32
Q

Political Considerations

A
  • Nationalism [focus on/put needs of own country ahead of others] -impact trade laws
  • Mistrust [try to create better relations between countries]
33
Q

Economic Environment

A
  • Infrastructure [if country doesnt have effect ports, roads- how to get goods out= high cost
34
Q

Natural Barriers

A
  • Language differences
  • Cultural differences
  • Legal and Regulatory differences
  • Different economic systems
35
Q

Tariff Barriers
Tariff:

A

A tax imposed on imported goods

36
Q

Protective Tariffs

A

Make imports less attractive to buyers than domestic products [e.g. domestic steel producers tariffs put on importive so so its higher cost for imports to make domestic more attractive to buyers]

Tariffs designed to make imports less attractive than domestic products by increasing import costs.

37
Q

How do protective tariffs benefit domestic industries?

A

They raise the price of imported goods, making domestic products more appealing to consumers.

38
Q

Non-tariff Barriers
Import Quota:

A

Limit on the quantity of a certain good that can be imported

39
Q

Embargo

A

A complete ban on imports or exports of a product

40
Q

Exchange Controls:

A

Laws that require a company earning foreign exchange from its exports to sell the foreign exchange to a control agency

41
Q

Customs Regulations

A

Regulations on products that are different from generally accepted international standards [enviromental regulations too, produce - pest free]

42
Q

The Reality of Trade

A

-If trade makes economic sense and global security sense, then why do we need international trade rules?

-Because while trade is beneficial globally …
►It creates winners and losers domestically (locally, regionally, nationally)
►This creates political pressure to “protect” from trade/globalization.
►Thus national rivalries, economic instability and lack of economic development

43
Q

Fear of Trade and Globalization

A
  • Canadians have lost jobs because of imports/production shifts
  • Others fear losing their jobs
  • Employers often threaten to export jobs when facing labour disputes with employees
  • Service and white-collar workers are increasingly seeing their operations moving offshore
  • Competition is beneficial for consumers but can hurt producers
  • Global Political/Economic Unrest: We are interconnected
44
Q

Benefits of Globalization

A
  • Productivity grows faster with a comparative advantage
  • Global competition keeps prices down, less likely to face inflation
  • Open economy spurs innovation
  • Export jobs often pay more than other jobs available
45
Q

The Future of The Global Marketplace

A
  • Canada – Exporting our technologies
  • Canada – Seeking new markets
  • Resources, stable banking, business friendly
  • The Emergence of BRICS Economic Power
  • Currency Fluctuations
  • Global Competition (rise of nationalism)
  • Global Political/Economic Unrest
46
Q

How has international travel and telecommunications affected the global economy?

A

They have created an interconnected global marketplace, turning the world into a “global village.”

47
Q

Why is global trade important for Canada and Saskatchewan?

A

Canada exports about half of what it manufactures, with 75% of exports going to the U.S.

48
Q

What is the balance of trade?

A

The difference between the value of a country’s exports and imports.

49
Q

What is CUSMA?

A

The Canada-Mexico-USA Trade Agreement that facilitates trade between these nations.

50
Q

What impact does globalization have on jobs and industries?

A

It can create job opportunities in some areas while leading to job losses and industry declines in others.

51
Q

What is the Trans-Pacific Partnership (TPP)?

A

A trade agreement among 12 Pacific Rim countries aimed at reducing trade barriers, though the U.S. has withdrawn from negotiations.

52
Q

How has the COVID-19 pandemic influenced global trade perspectives?

A

It may signify a shift to a new era in global trade, altering opportunities and challenges compared to the pre-crisis period

COMM 101 (3 decks)

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