International Business test

What is GDP?

Gross Domestic Product (GDP) is the total value of all goods and services produced within a country over a specific time period.

What are the main sectors that make up Canada’s GDP?

The main sectors are: Primary (agriculture, mining, fishing, forestry), Secondary (manufacturing, construction), Tertiary (services, including finance, retail, health care).

What is Canada’s cultural industry?

Canada’s cultural industry includes arts, media, film, music, and literature, shaping national identity and contributing economically.

What are the pros of foreign investment?

Pros include increased capital, boosted economic growth, job creation, and improved infrastructure.

What are the cons of foreign investment?

Cons include loss of control over domestic industries, risk of profit outflow, and potential exploitation.

How does Canada attract foreign investment?

Canada attracts investment through political stability, a strong legal system, skilled labor, and trade agreements like USMCA.

How is productivity measured?

Productivity is measured by output per worker or per hour worked.

How can Canadian companies improve productivity?

Companies can improve productivity through technological innovation, workforce training, better management, and infrastructure investment.

What is competitive advantage?

The ability of a company or country to produce goods or services more efficiently than competitors, leading to greater profitability.

What is foreign investment?

It's when individuals, companies, or governments invest capital into a foreign country's businesses, infrastructure, or industries.

Define productivity.

Productivity is a measure of the efficiency of production, calculated as output per unit of input.

What is the Human Development Index (HDI)?

A measure of a country's social and economic development, considering life expectancy, education, and per capita income.

What is a market economy?

An economic system where supply and demand determine prices, and resources are privately owned.

What characterizes a centrally planned economy?

An economy where the government makes all decisions about production, prices, and distribution of goods.

What is a mixed economy?

An economy that combines elements of both market and centrally planned economies, involving both private and government entities.

What is democracy?

A system of government where power is held by the people, typically through elected representatives.

What is autocracy?

A system where one person holds absolute power.

Define totalitarianism.

A political system where the state holds total authority over society and controls all aspects of public and private life.

What are developed economies?

High income, advanced infrastructure, and high standard of living economies (e.g., Canada, USA).

What are economies in transition?

Economies moving from a centrally planned to a market economy.

What characterizes developing economies?

Lower income, emerging industries, and a focus on economic growth.

What does the Index of Economic Freedom measure?

It measures the economic freedom in a country based on rule of law, regulatory efficiency, and open markets.

What is monetary policy?

The process by which a government or central bank controls the money supply, interest rates, and inflation.

What is fiscal policy?

Government policy that uses taxation and spending to influence the economy.

What is absolute advantage?

When a country can produce a good more efficiently than any other country.

What is opportunity cost?

The loss of potential gain from other alternatives when one option is chosen.

Define comparative advantage.

When a country specializes in producing goods with the lowest opportunity cost, even without absolute advantage.

What are the four core economic questions?

1. What goods and services should be produced? 2. How should they be produced? 3. For whom should they be produced? 4. Who controls the means of production?

Describe private property in a market economy.

In a market economy, private property is protected, profit is a key motivator, and competition is encouraged.

What is the role of private property in a centrally planned economy?

The state owns most property, profit is not a focus, and competition is limited.

How does a mixed economy treat private property?

In a mixed economy, private property and profit exist, but the government regulates to balance competition.

What is the expansion stage of the business cycle?

Increasing economic activity and growth in GDP.

What characterizes the peak stage of the business cycle?

The highest point of economic growth before a downturn.

What is contraction in the business cycle?

An economic slowdown characterized by declining GDP.

Define trough in the business cycle.

The lowest point before the economy begins to recover.

What contributes to Canada’s cultural industry's economic aspects?

Job creation and export of cultural goods.

What are the key elements of a mixed economy?

Both private and government entities play a role.

What influences a country's HDI?

Life expectancy, education, and per capita income.

What is the purpose of fiscal policy?

To influence the economy through government taxation and spending.

What fosters foreign investment in Canada?

Political stability and strong legal structures.

Describe the significance of tech innovation for productivity.

Technological innovation enhances output and efficiency.