AFM131 Lecture Notes - Lecture 1: Absolute Advantage, Joint Venture, Contract Manufacturer

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM131
• Professor: David H A

Document Summary

Global market is dynamic and progressive therefore must always scan business environment: To ensure taking advantage of opportunities and. Free trade: the movement of goods and services among nations without political or economic barriers. Inspire innovation-> more competitive interest rates low due to access of foreign investment. Loss comparative advantage because production can be done cheaper. Employees-connections worldwide, source raw material and production. Absolute advantage: an advantage where a country can produce a product more effectively or efficiently than any other country. Short lived- global competition advancement in technology ie; diamond in south africa vs world. Balance of trade: ratio of exports to imports. Balance of payments: difference between money coming in from exports and money going out from imports plus other money flow (tourism, foreign aid, military expenditures, and foreign investment) Favorable to have money flowing in than out. Location, population, common culture(language), natural resource, exchange rate.