Terms/Definitions
This term refers to the process of obtaining goods or services from suppliers outside of the home country.
What is global sourcing?
The total value of a country’s exports minus its imports is known as this.
What is the balance of trade?
This trade policy aims to shield domestic industries from foreign competition by imposing restrictions on imports.
What is protectionism?
A system in which the value of a country's currency is determined by supply and demand relative to other currencies.
What is a floating exchange rate?
This international financial institution provides loans and grants to developing countries to reduce poverty.
What is the World Bank?
This business structure occurs when a company partially owns and operates a separate company in a foreign country.
What is a foreign subsidiary?
When a country exports more than it imports, it has this type of balance of trade.
What is a trade surplus?
A government order that completely restricts trade with a particular country.
What is an embargo?
A deliberate reduction in the value of a country’s currency by its government.
What is currency devaluation?
This global organization regulates trade disputes between countries.
What is the World Trade Organization (WTO)?
A contractual agreement where one company grants another company the rights to use its name, brand, and business model.
What is a franchise?
Canada is the largest exporter of this natural resource, often used in construction and paper production.
What is lumber (or timber)?
A restriction that limits the quantity of a specific good that can be imported or exported.
What is a quota?
If the exchange rate is 1 CAD = 0.77 USD, how much is $50 CAD worth in USD?
What is $38.5 USD?
Name one of the top three trading partners of Canada.
What is the United States, China, or Mexico?
This business strategy involves two or more companies coming together to form a new entity while sharing risks and profits.
What is a joint venture?
This agreement between Canada, the U.S., and Mexico replaced NAFTA in 2020 to regulate trade.
What is the USMCA (United States-Mexico-Canada Agreement)?
Trade sanctions can include restrictions on financial transactions, limits on trade, and bans on providing services. Name two types of sanctions.
What are economic sanctions and financial sanctions?
If inflation rises in a country, its currency will typically do this compared to other global currencies.
What is depreciate?
The term for when a country produces a good more efficiently than another country.
What is absolute advantage?
The increase in worth created at each stage of production, which makes a product more valuable than its raw materials.
What is value added?
Tariffs are often used to protect domestic industries, but they can have this negative economic impact, leading to higher prices for consumers and potential retaliation from other countries. This is called_____
What is a trade war (or increased costs for consumers and businesses)?
This type of sanction specifically targets_________ rather than an entire country and can include travel bans or asset freezes.
What are individual/organizational sanctions?
Name two factors that can cause exchange rates to fluctuate.
What are interest rates, inflation, political stability, trade balances, and economic performance?
This economic theory suggests that countries should specialize in producing goods where they have a lower opportunity cost and trade for others.
What is comparative advantage?