International Business test

Here's a review sheet based on your test topics:

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Key Concepts:

1. 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. It reflects the economic performance of a nation.

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

- The main sectors include:

- Primary sector (agriculture, mining, fishing, forestry)

- Secondary sector (manufacturing, construction)

- Tertiary sector (services, including finance, retail, health care)

3. Describe Canada’s cultural industry.

- Canada’s cultural industry includes arts, media, film, music, and literature. It plays a role in shaping the national identity and preserving Canadian culture, while contributing economically through job creation and export of cultural goods.

4. Pros and cons of foreign investment & How does Canada attract it?

- Pros: Increases capital, boosts economic growth, creates jobs, improves infrastructure.

- Cons: Loss of control over domestic industries, risk of profit outflow, potential exploitation.

- Attracting investment: Canada offers political stability, a strong legal system, skilled labor, and trade agreements like USMCA.

5. How is productivity measured & how can Canadian companies improve it?

- Productivity is measured by the output per worker or per hour worked. Companies can improve it through technological innovation, workforce training, better management, and investing in infrastructure. (pg. 110)

Definitions:

Competitive Advantage

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

Foreign Investment

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

Productivity

- A measure of the efficiency of production, calculated as output per unit of input, such as labor or capital.

Human Development Index (HDI)

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

Economic Systems:

Market Economy

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

Centrally Planned Economy

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

Mixed Economy

- Combines elements of both market and centrally planned economies, where both private and government entities play a role.

Democracy

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

Autocracy

- A system where one person holds absolute power.

Totalitarianism

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

Developed Economies, Economies in Transition, Developing Economies

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

- Economies in transition: Moving from a centrally planned to a market economy.

- Developing economies: Lower income, emerging industries, focus on economic growth.

Index of Economic Freedom

- Measures the economic freedom in a country based on factors like rule of law, regulatory efficiency, and open markets.

Policies:

Monetary Policy (pg. 193)

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

Fiscal Policy (pg. 193)

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

Economic Theories:

Absolute Advantage

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

Opportunity Cost

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

Comparative Advantage

- When a country specializes in producing goods where it has the lowest opportunity cost, even if it doesn't have an absolute advantage.

Economic Questions:

What four questions do all economic systems answer?

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?

Private Property, Profit, and Competition in Economic Systems:

- Market economy: Private property is protected, profit is a key motivator, and competition is encouraged.

- Centrally planned economy: The state owns most property, profit is not a focus, and competition is limited.

- Mixed economy: Private property and profit exist, but the government regulates to balance competition.

Business Cycle Stages:

1. Expansion: Increasing economic activity, growth in GDP.

2. Peak: The highest point of economic growth before a downturn.

3. Contraction: Economic slowdown, declining GDP.

4. Trough: The lowest point before the economy begins to recover.