Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

Business Fundamentals > Chapter 5 > Flashcards

Chapter 5 Flashcards

(59 cards)

Start Studying
1
Q

What is the total volume of world trade in dollars?

A

Approx 19 trillion $/year

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Define globalization

A

Integration of markets globally

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What type of system is the world becoming

A

Single interdependent

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Define imports

A

Products bought from manufacturers based in other countries to be sold in Canada

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Define exports

A

Products made in Canada bought by consumers in other countries

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What are the major world marketplaces?

A

North America (USA, Canada, Mexico), Europe, Pacific/Asia (Japan, China, India)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Who is Canada’s largest trading partner?

A

USA

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What are the two views in the Europe marktetplace?

A

Traditional (west vs east) and emerging (north vs south)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What are other important and emerging markets? (4)

A

South Korea, Thailand, Indonesia, Ukraine

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is BRICS?

A

Brazil, Russia, India, China, South Africa (trading partners)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Define absolute advantage

A

Country producing something more efficiently than any other country

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Define comparative advantage

A

Country producing specific item more efficiently (cheaper) than other items it produces

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What does the Theory of National Competitive Advantage focus on (7)

A

Factor conditions; demand conditions; related and supporting industries; strategies, structure, rivalries

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Define balance of trade

A

Difference in value between total exports and total imports

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Define trade surplus

A

Nation exports more than it imports

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Define trade deficit

A

Nation imports more than it exports

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Define balance of payments

A

Flow of money in/out of country

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What brings cash flow in?

A

Exports; foreign tourist spending in the country; foreign investments in the country; earnings from investments outside of the country

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What brings cash flow out?

A

Imports; country citizens spending more overseas (tourists); foreign aid grants; military spending abroad; country investing abroad; earnings from foreign investments in the country

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Define foreign exchange rate

A

Ratio of one currency to another

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Define a “strong” dollar

A

High demand for both $$ and products

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

When does the value of the dollar depreciate?

A

Exports increase while imports cost more

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

When does the value of the dollar appreciate?

A

Exports decrease while imports cost less

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

What questions should be asked to determine if an enterprise should go international? (4)

Study These Flashcards
A
  1. Is there international demand?
  2. Can product be modified to fit foreign market?
  3. Is foreign business climate suited to imports?
  4. Does firm have/can get necessary skills and knowledge to do business?
25
Define an exporter
Making products in one country and selling to others
26
Define an importer
Buying products in foreign markets to resell in home country
27
Define an international firm
Conducting most business abroad (domestic firm with international operations)
28
Define a multinational firm
Controlling assets, factories, mines, sales offices, affiliates in 2+ foreign countries; planning, decision making geared towards international markets
29
What is the international organization structure? (5)
Importing/exporting via independent agent -> licensing arrangement -> establishing branch office -> choosing strategic alliance -> foreign direct investment
30
Why have an independent agent?
Local indiv./org. representing exporter's interests; often selling products, collecting payments, ensuring customer satisfaction; understands language, culture, market
31
Why create a licensing arrangement?
Exporter gives a foreign company the exclusive right to manufacture or sell its product for a royalty or fee; franchising is a special form of a licensing arrangement
32
Why build a branch office? (4)
Established in foreign country Increased sales due to local presence More direct control May be a foreign legal requirement
33
Why form a strategic alliance (3)
May be mandated in some nations Get knowledge and expertise of the foreign partner Greater control
34
Why choose FDI
Companies buy or establish tangible assets in a foreign country (location benefits) Brings foreign investment to local economy Provides local employment
35
What are the barriers to international trade?
Social and cultural differences Economic differences Legal and Political Differences
36
What are examples of social, cultural differences? (5)
Language Population demographics Religious differences Social beliefs Shopping habits
37
What are examples of economic differences? (5)
the role of government in the economy planned vs. market economies capitalist socialist communist
38
What are legal and political differences? (6)
Quotas, tarrifs, subsidy, protectionism, local content laws, business practices
39
Define quotas
limitations on importation of a product class embargo-forbidding export/import from a nation United States v s. Cuba
40
Define tarrifs
a tax on imported goods raises government revenues as well
41
Define subsidy
government financial assistance for domestic firms
42
Define protectionism
protects local business at the expense of free market competition
43
Define local content laws
requires that at least part of the product be made in the foreign country (possible joint venture)
44
Define business practices (3)
Bribes Dumping Cartels
45
Define bribes
seen as “gratuities” to officials in some nations
46
Define dumping
selling goods abroad for less than a firm charges at home; illegal in most nations
47
Define cartels
associations of producers created to control supply and demand (e.g., O P E C)
48
Define GATT
General Agreement on Tarrifs and Trades
49
Define WTO
World Trade Org; 153 member nations, negotiate trade agreements, resolve trade disputes
50
Define EU
European Union; largest free marketplace in the world, 27 countries, Brexit (UK left in 2020), eliminates quotas, sets uniform tarrifs within unions
51
Define NAFTA
North American Free Trade Agreement; as of 1994, removes tarrifs/trade barriers between 3 countries
52
Define USMCA
US Mexico Canada Agreement; sept 30 2019; replaces NAFTA; opens 3.59% of Canadian dairy market to US; car content must originate 75% from North America
53
How are the GATT and WTO related
WTO came after GATT and is more powerful
54
Are people for or against trade liberalization
Against
55
What characterizes the opponents of free trade?
Job loss; market flooded with goods made in Mexico; loss of control over enviro. standards, natural resources, Canadian cultural sovereignty
56
What characterizes the supporters of free trade?
Access to US market; more exports, therefore more jobs; no threat to enviro., natural resources, cultural sovereignty
57
What are the 2 new major agreements in the works
CPTPP, CETA
58
Define CPTPP
Comprehensive and Progressive Agreement for TransPacific Partnership; 12 countries: Canada, Australia, Brunei Darussalam, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, US (who leaves in 2016)
59
Define CETA
Canada-European Union Comprehensive Economic and Trade Agreement; 27 Eu members (1/2 billion people), 98% of Canadian goods become duty free in EU, up from 25%

Business Fundamentals (15 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions