Unit 1 Test Review Flashcards
Mercantilism, Protectionism, and Free Trade – Which One Is Different?
Free trade – it promotes open markets, unlike mercantilism and protectionism, which restrict trade.
What makes our dollar more attractive?
A strong economy, high interest rates, and low inflation make the dollar more attractive to investors.
What was the point of the Banana Game?
It was about Fair Trade (Equity) – showing how conditions, wages, and supply chains impact workers and businesses.
What is Ethnocentrism?
The belief that one’s own culture or nation is superior to others.
What is a Supply Chain?
The network of businesses involved in producing and delivering a product, from raw materials to the customer
Four Types of International Business (IB) – Connect to Starbucks
Domestic – Starbucks started in Seattle.
International – Exported coffee to other countries.
MNC (Multinational) – Opened stores and sourced beans from multiple countries.
Global – Customizes products for different cultures (e.g., matcha lattes in Japan).
Pros and Cons of Trade
Pros:
✅ Economic growth
✅ Lower prices & variety
✅ Increased efficiency
Cons:
❌ Job losses
❌ Trade imbalances
❌ Dependence on other countries
WHO, NATO, and the Paris Agreement
WHO (World Health Organization) – Global health cooperation. NATO (North Atlantic Treaty Organization) – Military alliance for collective defense. Paris Agreement – Global climate deal to reduce carbon emissions.
Basics of Left vs. Right (Three Points Each)
Left (Liberal, Socialist, Democrat)
✔️ Supports government programs (healthcare, education)
✔️ Higher taxes on the wealthy
✔️ Focus on social equality & environmental policies
Right (Conservative, Capitalist, Republican)
✔️ Supports lower taxes & free markets
✔️ Less government intervention
✔️ Traditional values & strong national defense
Are Subsidies Good?
Pros: ✅ Help industries grow ✅ Lower prices for consumers Cons: ❌ Can create market inefficiencies ❌ Expensive for governments
Capitalism vs. Socialism
Capitalism – Private businesses drive the economy, minimal government control.
Socialism – Government provides essential services, wealth redistribution.
Liberal vs. Conservative | Democrat vs. Republican
Liberals/Democrats = Left-leaning (social programs, higher taxes on wealthy). Conservatives/Republicans = Right-leaning (lower taxes, free market policies).
What was the point of Tylazon?
Understanding corporate power and how businesses compete, And react to Union’s in their company.
Four Stakeholders and Their Needs
Customers – Quality products at fair prices.
Employees – Job security and fair wages. Shareholders – Profitability and growth. Community – Ethical business practices.
Impact of High or Low Dollar (Use ‘Attractiveness’)
High Dollar → Makes imports cheaper, exports more expensive (less attractive for foreign buyers).
Low Dollar → Makes exports cheaper, attracting foreign buyers, but raises import prices.
What Do the Leafs Want If They Pay Players in US$?
A strong Canadian dollar so that paying salaries in US$ costs them less in CAD.
Nationalism vs. Internationalism
Nationalism – Prioritizing one’s own country (protectionism, self-reliance).
Internationalism – Global cooperation and free trade.
Smoot-Hawley Tariff & Treaty Significance
Smoot-Hawley (1930) – U.S. increased tariffs, worsening the Great Depression. Trade Treaties – Reduce tariffs, encourage global commerce.
Consequences of Protectionism
Higher prices for consumers.
Retaliation from other countries.
Two Advantages & Two Disadvantages of Protectionism
✅ Advantages:
Protects domestic jobs.
Supports local industries.
❌ Disadvantages:
Higher prices for consumers.
Can lead to trade wars.
Banana Game & Fair Trade (3 Marks Answer)
Fair Wages & Equity – Farmers need fair compensation.
Working Conditions – Ethical sourcing matters.
Supply Chain Transparency – Consumers should know where products come from.
Significance of Prospective Activity
Thinking ahead in business helps with planning, competition, and adapting to economic changes.
What is FDI & Why It Matters?
Foreign Direct Investment (FDI) – When a company invests in another country (factories, businesses).
🔗 Connection to Competition: More FDI brings in competition, forcing local businesses to innovate and improve.
GDP Per Capita
A country’s total economic output divided by its population – measures standard of living.
Connection Between Inflation & Interest Rates
High Inflation → Higher Interest Rates (to slow spending).
Low Inflation → Lower Interest Rates (to encourage borrowing).
Who Sets Interest Rates?
Central banks (e.g., U.S. Federal Reserve, Bank of Canada).
Typical Inflation Over the Last 100 Years vs. Now
Historical Average: ~2-3% per year.
Recent Inflation (2020s): Higher due to supply chain issues and economic recovery (~5-8%).
Who Cares If You Haven’t Had a Pay Increase or Your Money Sits in a Bank?
Inflation decreases purchasing power – If wages don’t rise, you can afford less over time.
Savings lose value if interest rates are too low.
Why Buy an ETF?
ETF (Exchange-Traded Fund) – A collection of stocks in one investment.
Reason: You need to earn more than inflation to grow wealth.
Why Invest Instead of Keeping Money in a Bank?
Bank Interest Rates are often lower than inflation.
Investments (stocks, ETFs) grow wealth over time.
The “Market”
Refers to the stock market – where people buy and sell shares of companies.
What is the Couch Potato Strategy?
A simple, low-effort investment strategy using ETFs to build long-term wealth.
Debt-to-Income Ratio
Measures how much debt you have compared to your income – a key indicator of financial health.
Why Do Savings Rates Matter?
Higher savings rates = More money growing over time.
Low rates = Harder to keep up with inflation.
What does it matter if the prime rate goes up?
Borrowing becomes more expensive – higher interest rates on loans, mortgages, and credit cards.
Slower economic growth – people and businesses borrow less, reducing spending.
Good for savers – higher interest on savings accounts.
Susie studies Marine Biology but works as an Uber driver. What is this an example of?
Underemployment – when someone is working a job below their skill level or outside their field of study.
During a recession, what would likely happen?
Higher unemployment – businesses cut jobs.
Lower consumer spending – people save more and buy less.
Government stimulus – lower interest rates or relief programs to boost the economy.
Jimbo sells to the US. What does he want to happen to the CDN currency?
He wants a weaker Canadian dollar so that his products are cheaper for US buyers, making them more attractive.
Mercantilism, Protectionism, and Free Trade – Which One Is Different?
: Free trade – it promotes open markets, unlike mercantilism and protectionism, which restrict trade.
