Unit 1 Flashcards

Question

History of globalization

Answer 1

-Historians view the expansion of the Roman Empire as an early form of globalization.(research more) -Globalization began after WWII Establishment of the United Nations & the fostering of trade nations.<---helping smaller countries (GMOs more food.....)(research more) industrial revolution —> in England on late 1700s

Answer 2

1. 𝙊𝙪𝙩𝙨𝙤𝙪𝙧𝙘𝙞𝙣𝙜 -Use of outside resources (such as raw materials and labour) that were previously handled internally/domestically -Usually cheaper and can offer the customer lower prices 2. 𝙇𝙤𝙬𝙚𝙧 𝙋𝙧𝙞𝙘𝙚𝙨 Increased *competition* from foreign firms causes domestic companies to decrease prices 3. 𝘿𝙚𝙘𝙧𝙚𝙖𝙨𝙚 𝙞𝙣 𝙋𝙤𝙫𝙚𝙧𝙩𝙮 in those countries —-> 4. 𝘽𝙚𝙩𝙩𝙚𝙧 𝙅𝙤𝙗𝙨 in our country 5. 𝙊𝙥𝙩𝙞𝙢𝙖𝙡 𝙐𝙨𝙚 𝙤𝙛 𝙍𝙚𝙨𝙤𝙪𝙧𝙘𝙚𝙨 6.𝙄𝙣𝙣𝙤𝙫𝙖𝙩𝙞𝙤𝙣 Businesses that operate internationally can exchange technology. Open borders allows ideas to flow from one country to another 7.𝙄𝙣𝙘𝙧𝙚𝙖𝙨𝙚𝙙 𝘾𝙖𝙥𝙞𝙩𝙖𝙡 𝙁𝙡𝙤𝙬 (flow of money thru the countries !)

Answer 3

𝟏.𝐋𝐨𝐬𝐭 𝐉𝐨𝐛𝐬👷❌ Many Canadians have lost their jobs due to outsourcing (cheaper to hire overseas) 𝟐.𝐅𝐞𝐚𝐫 𝐨𝐟 𝐉𝐨𝐛 𝐋𝐨𝐬𝐬 😱 𝟑. 𝐋𝐨𝐬𝐬 𝐨𝐟 𝐂𝐚𝐧𝐚𝐝𝐢𝐚𝐧 𝐏𝐫𝐨𝐝𝐮𝐜𝐭𝐢𝐯𝐢𝐭𝐲 Some Canadian companies will lose their comparative advantages to countries with cheaper labour 🇨🇦😓 𝟒. 𝐄𝐱𝐩𝐥𝐨𝐢𝐭𝐚𝐭𝐢𝐨𝐧 𝐨𝐟 𝐂𝐡𝐞𝐚𝐩 𝐋𝐚𝐛𝐨𝐮𝐫 👿💰 𝟓. 𝐈𝐧𝐜𝐫𝐞𝐚𝐬𝐞𝐝 𝐏𝐨𝐥𝐥𝐮𝐭𝐢𝐨𝐧 Companies can move their factories to countries with limited pollution laws (save costs) 🏭 𝟔.𝐒𝐚𝐟𝐞𝐭𝐲 𝐂𝐨𝐧𝐜𝐞𝐫𝐧𝐬 ⚠ 𝟕. 𝐒𝐩𝐫𝐞𝐚𝐝 𝐨𝐟 𝐃𝐢𝐬𝐞𝐚𝐬𝐞 Covid-19 ☣ 𝟖. 𝐈𝐧𝐜𝐫𝐞𝐚𝐬𝐞 𝐢𝐧 𝐈𝐧𝐜𝐨𝐦𝐞 𝐆𝐚𝐩 Gap between rich and poor is widening Erosion of the middle class ⚖ 𝟗. 𝐈𝐧𝐟𝐥𝐮𝐞𝐧𝐜𝐞 𝐨𝐟 𝐌𝐮𝐥𝐭𝐢𝐧𝐚𝐭𝐢𝐨𝐧𝐚𝐥 **Corporations (MNCs) on Governments** Powerful MNCs can manipulate global politics (apple mcdonalds amazon) 👐🌍 𝟏𝟎. 𝐓𝐡𝐞 𝐞𝐧𝐭𝐢𝐫𝐞 𝐰𝐨𝐫𝐥𝐝 𝐦𝐚𝐲 𝐛𝐞 𝐚𝐟𝐟𝐞𝐜𝐭𝐞𝐝 𝐛𝐲 𝐚𝐧 𝐞𝐯𝐞𝐧𝐭 𝐭𝐡𝐚𝐭 𝐭𝐚𝐤𝐞𝐬 𝐩𝐥𝐚𝐜𝐞 𝐢𝐧 𝐨𝐧𝐞 𝐧𝐚𝐭𝐢𝐨𝐧.🧈 Recession (2008) Price of oil increasing Wars

Answer 4

An **ideology with a concern for the “the common” citizen.** Promotes **protectionism (restrict imports through tariffs, quotas etc.)** Goal is to **boost domestic industry.** Rising sentiment in many countries (US, France, UK)

Answer 5

https://www.youtube.com/watch?v=vmyH2YFR2cw&authuser=2

Answer 6

𝗘𝘅𝗽𝗮𝗻𝗱 𝗠𝗮𝗿𝗸𝗲𝘁𝘀 & 𝗜𝗻𝗰𝗿𝗲𝗮𝘀𝗲 𝗦𝗮𝗹𝗲𝘀 🌍Can lead to more profits 🌍Profits mean success for a business 𝟮. 𝗗𝗶𝘃𝗲𝗿𝘀𝗶𝗳𝗶𝗰𝗮𝘁𝗶𝗼𝗻 💐In order to diversify a company’s product line they may choose to enter a specific international market. 💐Prevents companies from restricting their products or services to the domestic market. 𝟯. 𝗖𝗼𝗻𝘁𝗿𝗼𝗹𝗹𝗶𝗻𝗴 𝗘𝘅𝗽𝗲𝗻𝘀𝗲𝘀 💰Every business wants to have low expenses; so some companies will therefore enter the global arena to minimize their costs 💰Companies will examine the resources they need and where they can get them at the lowest price 💰Business might choose to take advantage of lower labor costs, better technology, natural resources, tax incentives 𝟰. 𝗖𝗼𝗺𝗽𝗲𝘁𝗶𝘁𝗶𝘃𝗲𝗻𝗲𝘀𝘀🥊 Many companies expand globally for defensive reasons - to protect themselves from competitors or potential competitors, or to gain advantage over them

Answer 7

To protect local **businesses and jobs** Generate **revenue** **Protect citizens from harmful products**

Answer 8

using barriers to trade to protect domestic producers/industries from foreign competition.

Answer 9

Currency fluctuations: -Are a barrier to international trade. -Uncertainty in trying to price goods and services accurately. Exchange Rate: -Is the amount of currency in relation to the currency of another country. (ex. dollar in Canada is 0.74 in US) WINNERS OF A LOW CANADIAN DOLLAR: 𝐄𝐱𝐩𝐨𝐫𝐭𝐞𝐫𝐬: -foreign businesses want to buy Canadian goods -Canadian companies can sell more products cause they are cheaper -Benefits Canada's manufacturing sector 𝐂𝐚𝐧𝐚𝐝𝐢𝐚𝐧 𝐓𝐨𝐮𝐫𝐢𝐬𝐦: foreign travelers visit Canada because their dollar buys more CAD dollars. $63.3 Billion in revenue in 2021 $104.4 Billion in revenue in 2019 𝐂𝐚𝐧𝐚𝐝𝐢𝐚𝐧 𝐑𝐞𝐭𝐚𝐢𝐥 gain an edge because shopping in the United States in person or online is more expensive. LOSERS OF A LOW CANADIAN DOLLAR: 𝐈𝐦𝐩𝐨𝐫𝐭𝐞𝐫𝐬 -more expensive to import and sell products in Canada. -businesses that import expensive equipment, raw materials and technology have higher production costs 𝐂𝐚𝐧𝐚𝐝𝐢𝐚𝐧 𝐓𝐫𝐚𝐯𝐞𝐥𝐞𝐫𝐬 costs more to travel to the United States for business or pleasure 𝐌𝐚𝐣𝐨𝐫 𝐒𝐩𝐨𝐫𝐭𝐬 𝐓𝐞𝐚𝐦𝐬 pay their players in USD; more costly

Answer 10

**EXCHANGE RATE:** 🤝 (u should watch a video about this) It refers to the **value of the Canadian dollar against the currencies of other countries. Among other things, it helps determine how much we pay for imported goods and services and how much we receive for what we export.** The exchange rate plays a particularly important role in the Canadian economy because compared with other countries, imports and exports (trade) are a relatively large part of Canada’s economy. Most of our trade is with the United States, which is why the value of our dollar against the U.S. dollar is especially important. **CAD TO USD CHART:*🇺🇸🇨🇦https://www.xe.com/currencycharts/?from=CAD&to=USD&view=5Y **1 CAD = 0.736616 USD** **FLOATING EXCHANGE RATE** Canada has a floating exchange rate. That means there is no set value for our currency compared with any other currency. 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. **FACTORS AFFECTING THE EXCHANGE RATE** Several factors influence the supply of and demand for, Canadian dollars: 𝐈𝐧𝐟𝐥𝐚𝐭𝐢𝐨𝐧 𝐑𝐚𝐭𝐞 (the rate at which the prices of goods and services is rising over a period of time) -A low inflation rate causes investors to prefer the Canadian dollar because of the stability of prices. -A higher inflation rate (among other countries), investors are less likely to prefer to Canada because of the expectation that the value of the dollar will be eroded by inflation. 𝐈𝐧𝐭𝐞𝐫𝐞𝐬𝐭 𝐑𝐚𝐭𝐞 (is the price a borrower pays for the use of money they borrow from a lender) If interest rates are higher in Canada than in other countries, investors may choose to invest in Canada, increasing demand for the dollar. 𝐔𝐧𝐞𝐦𝐩𝐥𝐨𝐲𝐦𝐞𝐧𝐭 The number of Canadians without jobs. A low unemployment rate signals a stable, healthy economy, causing the CDN Dollar to rise 𝐆𝐫𝐨𝐬𝐬 𝐃𝐨𝐦𝐞𝐬𝐭𝐢𝐜 𝐏𝐫𝐨𝐝𝐮𝐜𝐭 (𝐆𝐃𝐏) The value of all finished goods and services produced by a country over a specific time period. A stable or rising GDP indicates a healthy economy, causing the CDN dollar to rise. 𝐓𝐞𝐫𝐦𝐬 𝐨𝐟 𝐓𝐫𝐚𝐝𝐞 (𝐭𝐫𝐚𝐝𝐞 𝐛𝐚𝐥𝐚𝐧𝐜𝐞) The greater a country’s exports in comparison to its imports, the greater the demand for its currency. Canada exports more than we import; there is a greater demand for our currency and the CDN dollar will rise. 𝐏𝐨𝐥𝐢𝐭𝐢𝐜𝐬 Political stability can affect the exchange rate. If investors are worried about political tension or the threat of terrorism in a particular country, the demand for its currency decreases. 𝐏𝐬𝐲𝐜𝐡𝐨𝐥𝐨𝐠𝐢𝐜𝐚𝐥 𝐅𝐚𝐜𝐭𝐨𝐫𝐬 In times of international upheaval, the Swiss Franc is considered a refuge currency. The U.S. Dollar and the Euro are also seen as safe currencies. 𝗛𝗮𝗿𝗱 𝗖𝘂𝗿𝗿𝗲𝗻𝗰𝘆– easily converted to other currencies around the world (the U.S. dollar, the Euro, CDN dollar) 𝗦𝗼𝗳𝘁 𝗖𝘂𝗿𝗿𝗲𝗻𝗰𝘆 – not as easily converted (Chinese Yuan, Russian Ruble) **SPECULATING** -It involves buying, holding, or selling foreign currency in anticipation of its value changing. -One way to overcome the barrier of currency exchange -For example: if you were planning a trip to Florida in the winter, and you heard on the news that the CDN dollar was probably going to go down in the next month, you would purchase U.S. Dollars now in anticipation.

Answer 11

https://www.investopedia.com/terms/c/competitive_advantage.asp

Answer 12

Is a product/service that a country or company is better at producing than its competitors. The advantage can be based on: technology access to raw materials marketing management quality price warranty

Answer 13

*product’s ability to satisfy the needs and wants of the customer* (◠‿◕) Companies that achieve a competitive advantage manufacture products or provide services that have greater economic utility, or usefulness, than product or services supplied by their competitors

Answer 14

🪷**Quality & quantity of natural resources** 🪷**Strength of the country’s currency and its exchange rate** 🪷**Infrastructure in the country** 🪷**Research & Development** 🪷Workforce characteristics 🪷Societal characteristics 🪷**Entrepreneurship** 🪷Government involvement

Answer 15

Are taxes or duties put on imported products or services. They raise the cost of imported goods. Canada has a free trade agreement with the United States and Mexico (CUSMA). (read more on cusma and nafta..?) see tariff chart example on slide 4 and 5 https://docs.google.com/presentation/d/1TnZBXuWSFyZ6FLy4Gzoz4GiRRjaoUErv4oe9Uwsv220/edit#slide=id.p4

Answer 16

1.Domestic governments they collect the additional taxes 2.Local producers their goods are more competitively priced 3.Local employees they keep their jobs

Answer 17

1. Foreign Producers their goods are now more expensive 2. Consumers the price of the products go up and are forced to pay higher prices 3. Foreign employees the people working overseas lose out on opportunities

Answer 18

Is a government imposed limit on the amount of product that can be imported in a certain time period. Canadian Products Subject to U.S Quotas: Beef Cotton Wool Synthetic Fibres Imported Products Subject to Canadian Quotas: Agricultural products Firearms Steel Textiles Clothing

Answer 19

◘Imposed by the government. ◘Bans trade on a specific product or with a specific country. ◘Often done to put pressure on foreign governments to change their policies or to protest human rights violations. When Canada imposes a trade embargo: 🇨🇴There is an increased need on domestic products. 🍌May cause the price of a product to increase, because the supply has decreased. WHEN ANOTHER COUNTRY IMPOSES A TRADE EMBARGO ON CANADA? 🌼There is a surplus domestic supply. 🌼Canadian companies need to find alternative markets to buy their products. 🌼If not, they need to decrease production or close factories.

Answer 20

Parent company allows a branch of its company in another country to be run as an independent entity. Parent company sets targets to be met. allows local management to incorporate counties culture customs .Toyota.