November 8 Management lecture.docx

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Financial Accounting
Chris Bovaird

November 8/2012 After the break: Barriers to Trade: What; government restrictions that  Hurt foreign countries  Hurt foreign businesses  Help domestic businesses Why- to create jobs here - Why should we buy American software, when we can make our own in India- closed minded thinking - India accussed of making it difficult to export stuff into India - Countries engage in protectionism – protect local jobs and industries by making in difficult for foreign countries to sell their stuff in the domestic market - Things that gvmts do, additional costs/laws to make it more expensive/harder/longer for domestic market to import foreign goods - Why do gvmts place barriers on intl trade- to make it difficult for foreign business to trade with domestic businesses – to preserve jobs here Tariffs: A fee, or a cost, imposed on an item imported into a country- a tax. A simple example is: bottled wine made in Canada vs bottled wine made in france. Canadian wine is $13, and the one made in France is $11. Problem- we do have a domestic wine industry- Niagara region makes a living in tourism industry making wines. Eventually the 13 bottle will go out of business. Now pay $30 to government of Canada, tariff goes to Canada, revenues and to subsidize the wine industry or create more jobs, or make new technology. Making the French bottle for 2. 50 extra is now 13.50! ( since the 30 tariff) now you will opt for Canadian wine, since its now cheaper than the French wine. Creating revenue in Canada and jobs in Niagara = protective tariff. 30 is the fee to protect the Canadian industry, without the tariff people are more likely to buy the French wine. To proect jobs revenue, profitiabili
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