Unit 1 Flashcards
1
Q
What is business defined as?
A
The manufacturing and/or sale of a good/service to satisfy the wants and needs of consumers to make a profit
2
Q
What is a transaction?
A
An exchange of things of value
3
Q
What is a domestic business?
A
A business that conducts transactions only within the country it is based
4
Q
What is an international business?
A
A business that conducts transactions in different countries
5
Q
What are the five ways to be international?
A
- Own a retail or distribution outlet abroad
- Own a manufacturing plant abroad
- Export to businesses abroad
- Import from businesses abroad
- Invest in businesses abroad
6
Q
Are trade and business synonymous?
A
True
7
Q
What is a trading partner?
A
One country’s business relationship with another
8
Q
Between whom does international trade occur?
A
Between businesses, not countries
9
Q
When did ships from France and England sail to Quebec?
A
In the 1600’s
10
Q
Who were the first trade partners in Canada?
A
First Nations peoples (Ojibwa & Cree)
11
Q
What was exchanged in the first trade in Canada?
A
- Furs
- Food
- Blankets
- Rifles
12
Q
What major cities were involved in European trade in the 1700s?
A
- Halifax
- Montreal
- Quebec
- Ottawa
- Kingston
- Toronto
13
Q
What increased demand for Canadian raw materials in the 1700s?
A
Defeat of France in the Seven Years War
14
Q
What did the U.S. become after 1776?
A
Self-reliant and needed Canadian raw materials
15
Q
What is the biggest trading partner of Canada?
A
United States
16
Q
When was NAFTA established?
A
In 1994
17
Q
What has been a significant import from Japan since the 1940s?
A
Electronics and automobiles
18
Q
What is a key feature of China’s economy since the 1980s?
A
Liberal communism and cheap labor
19
Q
What are the prospects for non-oil trade in the UAE?
A
Stronger prospects
20
Q
What is a major challenge for trade with India?
A
High tax, poor infrastructure, cultural differences, and corruption
21
Q
What imports does Canada receive from India?
A
- Diamonds
- Linen
- Clothing
- Rice
22
Q
What percentage of Canadian imports does Africa account for?
A
< 1%
23
Q
What are some imports from South Africa?
A
- Gold
- Manganese
- Wine
- Oranges
24
Q
What imports does Canada receive from Morocco?
A
- Mandarin oranges
- Oil
- Olives
- Spices
25
What is globalization?
Process whereby national and/or regional economies and cultures have become integrated through:
* New global communication technologies
* Foreign direct investment
* International trade
* Migration
* New forms of transportation
* Money flow
## Footnote
Globalization encompasses the interconnectedness of economies and cultures on a global scale.
26
What are some benefits of going global?
Benefits include:
* Cheap labour and materials
* Plenty of office space and manufacturing facilities
* Integration of sales, finance, monetary markets, manufacturing, transportation and communication
## Footnote
Going global can enhance efficiency and reduce costs for businesses.
27
What is a potential negative consequence of globalization?
Can cause a domino effect of harm
## Footnote
Examples include the 2008 global financial crisis and the impact of the Coronavirus in 2020.
28
When did the history of globalization officially begin?
Officially began after World War II
## Footnote
This period saw the establishment of the United Nations which encouraged trade and cooperation.
29
What role did the United Nations play in globalization?
Encouraged trade, tax treaties, and abolished tariffs and capital controls
## Footnote
The UN facilitated economic cooperation among nations.
30
What factors have dramatically increased the pace of globalization?
Factors include:
* New Technologies
* Socio-Political Issues
## Footnote
Technologies such as real-time invoices and financial transfers have accelerated global interactions.
31
What is interdependence?
The reliance of two or more nations on each other for products and services
## Footnote
Interdependence highlights the interconnected nature of global economies.
32
What are the three main types of industries involved in interdependence?
Three main types:
* Primary Industries
* Secondary Industries
* Tertiary Industries
## Footnote
Each industry plays a different role in the economy and contributes to interdependence.
33
What is a Branch Plant?
A factory operated from a country outside of a host country
## Footnote
An example is Toyota, which is based in Japan but has a plant in Cambridge, ON.
34
What are the advantages of a Branch Plant?
Advantages include:
* Employ Canadians
* Pay Canadian taxes
## Footnote
Despite being foreign-owned, Branch Plants contribute to the local economy.
35
What are the disadvantages of a Branch Plant?
Disadvantages include:
* Limited business functions
* Innovation challenges
* Non-Canadian materials
* Exports don’t count in Canadian balance of trade
## Footnote
These factors can limit the economic benefits of foreign investment.
36
Name some major foreign-owned businesses in Canada.
Major foreign-owned businesses include:
* General Motors
* Ford
* Toyota
* Old Navy
* McDonald’s
* Apple
* Walmart
* Subway
## Footnote
These companies represent significant foreign investment in the Canadian economy.
37
What are trade barriers?
Restrictions on trade imposed by governments on international businesses and other countries.
38
Why do governments impose trade barriers?
To allow domestic companies to succeed and to coerce countries to comply with certain policies.
39
What are tariffs?
Taxes on imports.
40
How do tariffs affect consumer behavior?
Raises the cost so consumers buy domestic.
41
Who benefits from tariffs?
* Domestic Governments
* Local Producers
* Local Employees
42
Who loses from tariffs?
* Foreign Producers
* Foreign Employees
* Consumers
43
What is a quota?
A limit on the amount allowed in a certain time period.
44
What is the effect of quotas on prices?
Causes prices to rise.
45
What is an embargo?
A ban on trade of products or with countries, often to apply pressure.
46
What can result from an embargo?
May cause domestic prices to rise due to lower supply.
47
What is the Foreign Investment Restrictions Act?
Ensures many foreign investments are reviewed for suitability.
48
What are the investment thresholds for review under the Foreign Investment Restrictions Act?
* >$5M for non-WTO
* >$312M for WTO
49
What industries are auto-reviewed for foreign investment?
* Uranium
* Financial
* Transport
* Cultural
50
What is the purpose of standards in trade?
To ensure international standardization.
51
Which organization is responsible for international standards?
International Organization for Standardization (ISO 9001/14001).
52
What is a non-governmental organization (NGO)?
An organization that operates independently from government influence.
53
True or False: Tariffs benefit only domestic companies.
False
54
Fill in the blank: Tariffs are also known as _______.
Duties
55
What are the reasons for trade?
Company growth, Expanded customer base, Increased profits, Inexpensive supplies, Cheap labour, Access to additional financing
## Footnote
These factors contribute to the overall benefits and motivations for engaging in international trade.
56
What is Foreign Portfolio Investment?
Investments in foreign companies, Stocks, bonds, etc., Investors looking for greater profits
## Footnote
This type of investment allows individuals or firms to diversify their portfolios by investing in international assets.
57
What percentage of the global stock/bond market does the Canadian economy represent?
2%
## Footnote
This highlights Canada's relatively small share in the global financial markets.
58
What is importing?
Bringing products/services into a country
## Footnote
Importing can involve various goods and services, including raw materials and equipment.
59
What are examples of imports into Canada?
Machinery, motor vehicles, oil, chemicals, electricity
## Footnote
These categories represent significant sectors from which Canada sources goods.
60
What is exporting?
Selling goods to companies outside of home country
## Footnote
Exporting is a key component of international trade, allowing countries to sell their products abroad.
61
What types of goods does Canada primarily export?
Motor vehicles, aircraft, chemicals, telecommunications, pulp and paper, fertilizers, natural gas, aluminum
## Footnote
These exports are vital to Canada's economy and trade relations.
62
What is a Licensing Agreement?
Permission to use a product, service, brand name or patent, Specific to a certain geographic region
## Footnote
Licensing agreements facilitate market entry and brand expansion without full ownership.
63
What is the role of Exclusive Distribution Rights?
Allow company to be ONLY distributor of a product in a certain area
## Footnote
This strategy helps companies establish strong market presence and control over distribution.
64
What is Franchising?
Agreement to use a company’s name, services, products and marketing, Franchisor charges a fee and provides support
## Footnote
Franchising allows for rapid expansion with reduced financial risk for the franchisee.
65
What is a Joint Venture?
2 companies form a new company, 25-40% of all foreign investment
## Footnote
Joint ventures often help companies enter new markets while sharing risks and resources.
66
What is a Foreign Subsidiary?
Parent company opens a branch plant in another country to be run as an independent entity
## Footnote
This structure provides operational flexibility and local market adaptation.
67
What is the failure rate of Joint Ventures?
50%
## Footnote
This statistic underscores the risks associated with joint ventures in international business.
68
What is an example of a successful Foreign Subsidiary?
Toyota in Cambridge and Woodstock
## Footnote
These plants illustrate how foreign companies can successfully operate in Canada.
69
Fill in the blank: Canada mainly imports from _______.
the US
## Footnote
The US is Canada's largest trading partner, significantly influencing trade dynamics.
70
What are some Canadian-owned franchises?
Casey’s, Kernels Popcorn, Second Cup
## Footnote
These franchises represent successful Canadian businesses that have expanded their reach through franchising.
71
What is the first benefit of international business for Canadians?
Product Variety
## Footnote
Provides Canadians with a wide variety of choices such as shoes, movies, and channels, leading to lower costs and prices.
72
How does international business impact costs for Canadians?
Lower costs lead to lower prices
## Footnote
For example, saving $0.01/kg of coffee each month can result in $1,000/month in savings.
73
What is a concern regarding whether companies pass on savings to consumers?
Retail price, raises, dividends
## Footnote
Companies may choose not to pass on the savings to consumers.
74
What is the second benefit of international business related to markets?
New Markets / Jobs
## Footnote
Expansion into markets like China and India can create jobs, as seen with Tim Horton's expansion in the US.
75
What is an example of a company that has expanded and hired in Canada?
Google in Waterloo
## Footnote
As businesses expand, they need to hire across the entire supply chain.
76
What type of investment is referred to as Foreign Direct Investment?
Control of some or all operations
## Footnote
It involves direct control over business operations in a foreign country.
77
What type of investment involves stocks, bonds, and mutual funds?
Portfolio Investment
## Footnote
This is considered a capital market investment.
78
What is a benefit of foreign investment for Canadians?
Canadian FDI, Venture Capital, Trade Missions
## Footnote
These avenues can help stimulate the Canadian economy.
79
What is the fourth benefit of international business?
New Processes/Technologies
## Footnote
This allows for easier access to efficient and economical equipment, increasing profitability.
80
What is a drawback of international business related to culture?
Loss of Culture/Identity
## Footnote
Canadians consume a lot of U.S. culture, which can overshadow local productions.
81
What does the Canadian Radio-Television and Telecommunications Commission (CRTC) do?
Establishes quotas for Canadian content
## Footnote
This is to stimulate Canada’s cultural productions and promote Canadian artists.
82
What is the last Canadian movie you went to see? (Fill in the blank)
_______
## Footnote
This question reflects the challenge of competing with Hollywood blockbusters.
83
What is a concern regarding foreign ownership of Canadian companies?
Foreign loyalties
## Footnote
Foreign companies may prioritize their native country over Canadian interests.
84
What is a consequence of reduced R&D in foreign-owned Canadian companies?
Lack of R&D conducted in Canada
## Footnote
This may lead to reduced exports and fewer employment opportunities.
85
What economic effect can foreign ownership have on Canada?
Revenue leaves Canada
## Footnote
This can lead to economic destabilization and a reliance on foreign economies.
86
What crisis exemplifies Canada’s vulnerability due to a branch plant economy?
US Subprime Crisis
## Footnote
Canada is affected by the economic conditions of other nations.
