Exam Review

qQuestions I have a hard time on

Chapter 1

• Netflix is an International transaction
• European settlers sent Raw Materials
• What European settlers look for (Gold, silver, goods)
• Countries charge tariffs as a way to protect their workers such as protectionism
• (Tariffs is a tax)
• Balance of trade - Exports - Imports
• India attracts international business due to lucrative domestic market
• GDP = Gross Domestic Product
• Exports > imports = Trade surplus - sell more than u buy
• Exports < imports = Trade deficit - buy more than you sell

Organization of Petroleum Exporting Countries (OPEC):

1. was founded by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela
2. They are a group of independent producers who try to control the supply of oil

4 ways bushiness helps Canadians / Advantages

1. Variety
2. Lower prices
3. New markets
4. More jobs

4 ways international business hurts Canadians

1. Job loss
2. Profits leave Canada
3. Reduced Exports
4. Economic Destabilization

Disadvantage international trade.

1. Economic destabilization
2. Revenue leaving Canada to pay company office costs
3. Loss of culture and identity.

Problems associated with foreign ownership

1. Job loss
2. Revenues leaves host country to pay head costs
3. Research & Development challenges
4. Reduced Exports
5. Economic destabilization

Chapter 2

• When currency decreases it’s called - Currency devaluation
• Anticipation of currency value changing is called - Currency speculating
• Buy US currency when CAD currency is expected to go down
• Investing in stock - Greater risk = Greater reward / Lower risk = Lower rewards
• Advantages of a join venture = Cultural information
• Trade quota extra income does not go to the government
• Trade quota is also not a form of protectionism
• 50% of all joint ventures fail
• Licensing is most often used for manufacturing processes. (True)
• Franchising is an agreement to use a company's name, products, services and marketing
• Canadian Invest to increase their wealth and save for retirement
• Exports = Sell
• Imports = Buy

Why do countries trade?

1. Lower costs
2. Company growth
3. Increased profit
4. Expanded customer base

Name and explain 6 trade barriers

1. Tariffs: Are taxes or duties put on imported products or services
2. Trade embargoes: Which means banning trade between two countries
3. Trade sanctions: Means limiting trade of specific products with specific companies or individuals
4. Standards: When countries have different standards for a product on how they’re used/performed
5. Time zones: Time differences around the world
6. Trade quota: Government-imposed limit on the amount of product that can imported in a certain time period.

Winners of Canadian dollars

1. Exporters
2. Canadian Tourism
3. Canadian Retail

Losers of Canadian dollar

1. Importers
2. Canadian Travelers
3. Major sports teams

Why is Canadian dollar low?

Canadian dollar is lower than US dollar

• Low oil prices
• High housing prices in Toronto & Vancouver
• Threat of protectionist policies from the US

Hard currency

Safe, stable, and easily converted to other currencies

• Euro
• U.S Dollars
• Canadian currency

Soft Currency

Not easily converted

• Russian ruble
• Chinese Yuan

==Chapter 3==

• Canada is a large country with a small population
• The Canadian bank system is big and stable
• Canada’s business taxes are the lowest in the G7
• Canada’s economy is based primarily on the service sector
• A low GDP = a low standard of living / A high GDP = a high standard of living
• Canada is less productive than the united states
• Employees in Canada will changes jobs 10-14 times
• Routine skill based jobs are moving to countries with a strong education system, ex. India
• Older offices will have more closed off areas (Cubicles)
• Canada has a score of 14th place in the Global competitive index
• Rationalization does not mean invest
• An assembly line worker is from the manufacturing industry
• Telecommuting allows companies to hire employees located all across the globe.
• Forklift operator is Manufacturing
• Software engineer is service
• Productivity is measured by GDP per capita
• Hewers of wood and drawers of water is a phrase often used to describe Canada

Benefits to international business

1. Increased employment
2. access to better technology
3. new products and services
4. Diversity of influence on Canadian Culture

Negative effects on international business

1. Loss of manufacturing jobs
2. the sale of unsafe products
3. shift away from Canadian made products and culture

The big six (Banks)

1. RBC
2. TD
3. CIBC
4. National Bank
5. BMO
6. Scotiabank

What are Canada’s main competitive advantages?

1. Banking industry
2. Service industry
3. Cultural industry
4. Technology industry

%%What does Foreign investment provide?%%

1. Jobs
2. New technology
3. improve productivity
4. Forces domestic companies to be more competitive

Canada’s competitive advantages includes

1. Banking
2. Entertainment
3. Technology

Advantages of Canada’s cultural industry

1. Entertainment
2. Employment
3. The music industry

%%Advantages of foreign investment%%

1. Increases economic activity
2. bring new technology
3. improves productivity

Disadvantage of foreign investment

1. Profits leaving Canada

Global factors influence a country’s productivity

1. Trade liberalization
2. Currency fluctuations
3. Commodity prices
4. Political stability

Ways Canadian companies could improve their productivity

1. Increasing post-secondary institutions funding
2. Government programs in science and technology
3. Attracting more foreign investment
4. Encouraging employers to increase and improve their training programs

Why are Canada's banks profitable and well-capitalized in comparison to US and European banks?

1. Larger in size

( The Canadian bank system is big and stable )

\n In business, rationalization includes

1. downsizing
2. cut backs
3. lay offs
4. relocating corporate functions

( Rationalization does not mean invest )

What is rationalization?

It is any attempt to increase a company’s effectiveness or efficiency.

Why is Canada’s productivity lower than that of the United States?

1. America consistently invests in more machines, equipment, communications and information technology.
2. More capital intensive.

Explain three reasons Canada is a great place for foreign investors.

1. Canada has the largest economy in the world results in more jobs to invest in
2. Canadians are well educated they're able to effectively work and make profit
3. Great electricity and technology for advanced businesses.

List and explain 5 ways Canada is often attractive to foreign investors

1. A supportve business environment: Canada has a strong , stable economy and has consistently maintained a low interest rate, inflation, and unemployed rates.

2. Gateway to the world: Canada has many trade agreements creating good relationships with other countries and allowing them to trade without tax. (NAFTA, CETA. APEC. CKFTA)

3. Infrastructure advantage: Canada has a strong infrastructure and transportation system easy for Canadians to communicate with each other for business.

4. Great place to live to attract employees: Canada is a great place to live as it is home to smart, talented, and educated Canadians. We also value, freedom, equality, tolerance, compassion, and justice.

5. Cultural diversity: Canada attracts highly educated and knowledgeable people who enhance and grow the workforce. Hiring employees with different backgrounds and experiences also introduce different view points. Canada is multicultural due to immigration policies.

Chapter 4

• Cultural intelligence: The ability to adapt, relate, and work effectively across various cultures

What are 4 cultural values a Canadian should be aware of when invited into a meeting in another country?

1. Time perception
2. Spatial perception
3. Non-verbal communication
4. Business etiquette.

Name and Explain all the 6 cultural dimensions

1. Power distance: The extent a culture will recognize or encourage authority
2. Uncertainty avoidance index: About the attitude towards taking risks with uncertain consequences
3. Long term vs short term orientation: How far you look ahead in a business decision.

Long term = rewards happening overtime / short term = rewards happening almost immediate (quick results)

4. Individualism vs collectivism: Individualism = taking care of yourself and your immediate family. Collectivism = A group society (we). Operating outside of that culture is considered shameful.
5. Masculinity vs femininity: The difference of style in decision making. For men they’re more faced based and aggressive while women are more calm and looks for more consultation or opinions.
6. Indulgence vs restraint: The measurement on life enjoyment/having fun.

Restraint = You have more control and don’t value leisure time (more strict)

Indulgence = You tend to spend more on fun experiences (carefree)

Chapter 5

What 4 questions define a countries economic system?

1. What should the country produce and in what quantities?
2. How should scarce resources such as labor and capital be allocated
3. How should goods and services be distributed throughout the country
4. What should be the prices of the goods and services

Name and explain 3 kinds of economic systems?

1. Market Economy: This Economy is determined by free competition  business, consumers, and government act independently of one another
2. Centrally planned economy: An economy system in which the government controls all elements of the economy, including prices, wages, and productions.
3. Mixed Economy: An economic system that sits between a market economy and a centrally planned economy, combining government intervention and private enterprise.

Name and explain the 4 stages of the business cycle for economies of countries?

1. Recession: The growth of GDP declines
2. Trough: Production and employment reach their lowest level
3. Expansion: Economy starts to grow again with employment, wages, production, and profit expanding
4. Peak: Top of the business cycle economy stops expanding and begins contracting