Ghosts
1) The world's largest exporter of goods in dollar value
2) The world's largest importer of goods in dollar value
1) China
2) USA
1) What is "Bilateral Trade"
2) Wh0 is your 'foreign market'
1) When two countries are importing and exporting between them. Trade is going both ways.
2) The consumers you are selling to who live in a country other than where the business is headquartered.
1) What is the Forex market (FX)?
2) If the exchange rate was $1 CAD = 0.65 USD... and you gave $100 CAD...how much USD would you get in return?
2) What is the strongest valued currency in the world from an exchange rate perspective
1) Refers to the global electronic marketplace for trading international currencies
2) $65
3) Kuwaiti Dinar
1) Regarding international trade: What is the theory of 'absolute advantage'?
2) Regarding international trade: What is the theory of comparative advantage?
1) A country can produce more of a good service than another country using the same amount of resources, thus being more efficient
Or to produce the same quantity of goods, but using fewer resources
2) A country has a comparative advantage if it has the ability to produce goods and services at a lower opportunity cost than its trade partner
1) What are tariffs, and who pays them?
2) What are trade quotas?
1) taxes on imported goods / the importer pays
2) a limit on the amount of a good that can be imported
1) Canada's most exported product in dollar value is?
2) Last year, Canada exported _____% of its total exports to the USA
1) Mineral fuels, including crude oil and natural gas
2) 77%
1) What does the term 'balance of trade' mean?
2) How is it calculated?
3) What is it called if a country has more imports than exports?
4) What is it called if a country has more exports than imports?
1) It means the difference between a country's exports and imports (net exports)
2) Exports - Imports
3) Trade Deficit
4) Trade Surplus
1) What is the most powerful currency in the world?
2) What are three reasons it is the most powerful?
1) USD
*A lot of world trade occurs in USD, even if the USA is not involved
*It is the world's reserve currency
*It is the largest economy in the world
*Politically and economically stable, so investors feel safe and trust holding the USD
The theories of absolute and comparative advantage help explain why countries produce what they are good at. This specialization leads to an increase in _____________ which leads to an increase in ______________ which leads to an increase in total ____________ and higher quality products.
1) Efficiency
2) Productivity
3) Output
1) What are trade embargos?
2) What are subsidies?
3) What are sanctions?
1) A ban on importing a specific product or trading with a specific country
2) When the government gives money to businesses in an industry: it can allow them to lower production costs and charge a cheaper price, undercutting the competition
3) Is an economic action taken by a country to coerce another to conform to an international agreement or norms of conduct. They can be placed on businesses, politicians, or financial leaders. Russia is currently experiencing this.
Identify 3 things that are restricted or controlled in their movement (imported) into Canada & why.
No answers can be drugs or weapons, or other obviously illegal items
1) Dairy products (quotas, especially for USA to protect Canadian dairy farmers)
2) Certain animals (invasive species) (endangered)
3) Certain plants (insects)
4) Counterfeit goods (fooling consumers, hurts local businesses)
5) Certain foods, like fresh meat (could carry disease)
6) Certain chemicals
1) What is 'global sourcing'?
2) Why would a business do this? Provide 3 reasons.
1) Refers to companies seeking goods and services beyond their borders (from the global market)
2) Access to specialized skills or knowledge, access to resources or goods not available domestically, finding better quality, increasing total supply capacity, cost-efficient (labour, raw materials, distribution)
1) What is 'reserve currency'?
2) What is the world's main reserve currency? And what currency is the second most widely held?
3) Guess what country has the most 'reserves' (foreign currency & gold)
1) a currency held by central banks in significant quantities. It is widely used to conduct international trade and financial transactions
2) USD / Euro
3) China (valued at about $3.5 trillion)
1) In what area does Canada have an absolute/comparative advantage over other countries?
2) What are 3 other ways a country could have an absolute or comparative advantage?
1) Abundance of natural resources >> oil, lumber, minerals
2) lower labour costs, advanced technology, more skilled labour, climate/environmental conditions, and developed infrastructure over time
Explain the concept of "protectionism"
- what is it (3 key points needed)
Protectionism is a political and economic term that describes government trade policy aimed at limiting imports into a country with the intent of protecting domestic industries and jobs within that country against foreign competition.
Identify 8 of Canada's current top 10 trading partners (that import the most from Canada)
USA
China
Germany
Japan
U.K.
India
Netherlands
Mexico
South Korea
Switzerland
What are 3 positives and 3 negatives of international trade? This can be for consumers, businesses, the country, or the world.
Positives: Economic growth, job creation, cultural exchange, company expansion, lower prices, variety of products/services, increase in quality, increase in innovation,
Negatives: job losses in some industries, can harm local businesses with competition, environmental impacts with production and distribution and resource exploitation, over-reliance on imports or exports, and political tensions (Trade War)
1)Does Canada have a floating or fixed rate?
2) Provide 3 reasons why a country would decide to ‘fix’ or ‘peg’ their currency to another country’s currency
** Floating rate
1) Control inflation levels
2) Boost foreign investment confidence
3) Create stability in the exchange rate for trade
1) What does the WTO stand for and do?
2) What does the IMF stand for and do?
1) World Trade Organization: Is an intergovernmental organization that regulates international trade. It creates and embodies the legal ground rules for global trade among member nations, thus offering a system for international commerce. There are currently 166 members. Canada is a member.
2) International Monetary Fund: Is an international organization that provides financial assistance and advice to member countries. It aims to promote global monetary cooperation and ensure financial stability. There are 191 member countries. Canada is a member and contributes money and resources.
The concept of ‘FAIRTRADE”
1) Who is it most often between?
2) What industry is it most often associated with?
3) What are the two main standards that must be upheld?
1) Producers in developing countries and companies in developed countries
2) Agriculture
3) **Working conditions: No forced labour or child labour, good working conditions, fair wages
**Environmental protection: Sustainable and environmentally friendly agriculture practices.
Identify & explain 3 ways in which Canada’s cultural diversity contributes to its competitive success in international business
1) More access to knowledgeable & skilled labour
2) Global connections
3) Multilingual
4) Vast cultural understanding
5) Global comfort in a diverse society
How can an increase in both imports and exports for a country be seen as a good thing for the country? Explain what a rise in both imports and exports indicates and results in.
Imports: Indicates a rise in domestic demand from businesses and consumers within the country. This suggests that people are spending money, likely because they have the means to do so. Results in higher consumer spending, which is a key economic driver.
Exports indicate increased foreign demand for Canadian products. This generates additional revenue for Canadian businesses. Enables businesses to increase production and hire more employees, creating more job opportunities for people. This all leads to economic growth for the country.
Identify and explain 3 factors that can affect a country’s exchange rate, AND how the exchange rate would be affected (weaken or strengthen)
Mr. O'Connell will explain in more detail...
1) Supply / Demand on the Forex market (demand up...dollar up)
2) Interest Rates (rates up...dollar up)
3) Inflation Levels (inflation low...dollar up)
4) Monetary & Fiscal Policy
5) Commodity Prices
6) Political Stability (more stable...dollar up)
7) Economic Growth / Performance (growth...dollar up)
1) What countries are in the G7?
2) What are the main countries in BRICS+?
3) Who is in the USMCA?
1) Japan, Canada, USA, France, Germany, Italy, the U.K., and unofficially the EU
2) Brazil, Russia, India, China, South Africa
3) USA, Mexico, Canada
Umbrellas Watches
Ireland 275 475
Australia 800 625
1) In Ireland, the production of 1 umbrella costs how many watches?
2) In Australia, the production of 1 umbrella costs how many watches?
3) If trading with each other, what country should produce umbrellas AND why?
1) 1.72 watches
2) 0.78 watches
3) Australia, because it has a lower opportunity cost