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MGTA03 - Week 7 - February 26, 2013.docx

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Management (MGT)
Course Code
Chris Bovaird

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MGTA03 – Week 7 – February 26, 2013 Mid Term Test - Saturday March 2 nd - Time : 9:00 – 10:30 A.M. - 50 MQ (1,2,3,4) - 4 SAQS - Bring a pencil (MC) and pen (SA) - Do not bring calculators & phones - IC 130 Chapter 5 – International Business Principle Points - International Trade – What it is/Why it Exists - Canada is “open” economy - Importance of Trade to Canada - NAFTA - Competitive Advantage (Theory) - Imports and Exports International Business – Defined - “Business activities that involve exchanges across national boundaries” o Ex. Canadian Business selling to US customer o Swiss business selling to Canadian customers (Ex. Toberlone Chocolate) International Business—Why? - Canada is an “Open Economy” - Canada is :”open” to trade o “Open” to flow of goods o & services across border - Because it raises living standards Trade – Import to Canada - We are one of the world’s largest exporters (Canada – 11 -- $393 billion) Canada’s Biggest Customers 2011 - USA – 73.8% - UK – 4.2% - China – 3.8% - Japan – 2.5% - Trade = 25 – 30 % of Canadian GDP - International trade is really important to Canada because it represents 30% of our economic activity - We are very dependent on the Americans and it is actually a bad thing o Ex. Recession NAFTA - North America Free Trade Agreement - Canada, USA and Mexico - 450 million people - No barriers, no protection - Promotes trade between the three Why do we Import and Export? - Competitive Advantage o The theory that explains what we should import and export - No country can make everything quickly, cheaply and well - Some countries can make things quicker, cheaper, better than others - Faster, cheaper and easier to make some things here - Faster, cheaper and easier buy other things from elsewhere - Some things we can make - Other things we can’t Absolute Advantage - A nation can produce some goods or services that other countries can’t - Why? o Geography o Climate o Language o Culture o Workforce Absolute Advantage: Example - A product that Canada can harvest, extract, make or supply that other countries can’t o Simply because it’s here  Maple syrup  Oil  Potash (High quality fertilizer) Comparative Advantage -
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