Class Notes (837,327)
Canada (510,231)
MGTA01H3 (348)
Lecture

ch5.docx

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Department
Management (MGT)
Course
MGTA01H3
Professor
Chris Bovaird
Semester
Winter

Description
ch 5  globalization is the integration of markets globally o Canada is an open economy —canada is "open" to trade —"open" to the flow of goods and services across the border —Because: it raises living standards o International Business: Business activities that involve exchanges across national boundaries  imports are products that are made or grown abroad and sold in Canada —products/services that we can't make particularly quickly, cheaply, or well so we buy it from others (we get stuff made by folks who are good at it, they get Canadian money)  exports are products made or grown in Canada that are sold abroad —products/services that we make in abundance quickly, cheaply, or well so others buy it from us (we get their money, they get stuff we're good at making)  per capita income is the average income per person  North America Free Trade Agreement (NAFTA) is an agreement between Canada, USA and Mexico which promotes trade between the three and in which there are no barriers nor protection o Why do we import/export? —Faster, cheaper, and easier to make some things here —Faster, cheaper, and easier buy other things from elsewhere —Some things you can make, other things you can't *************************************************************************** Sources of competitive advantage  Absolute advantage is a nation's ability to produce something more cheaply or better than in any other country —EX: A product that Canada can harvest, extract, make or supply more quickly, more easily, more plentifully than other country can simply because it's here. --maple syrup  Comparative advantage is a nation's ability to produce some products more cheaply or better than it can others —A nation chooses to specialize  (not impt) national competitive advantage is when a country will be inclined to engage in international trade when factor conditions demand conditions, related and supporting industries, an strategies/structures/rivalries are favorable ****************************************************************************  Balance of trade = exports - imports —ex. historically, Canada's balance of trade is positive (exported more than we imported). As the loonie goes up, trade balance goes down (exports decrease since ppl don't want to buy since the dollar value is high, instead we import from US to receive items at a discounted price--as by exchange rate: the ratio of one currency to another. When the dollar value is low, exports increase as US will receive discounted prices and imports decrease since we buy less from US)  Trade surplus occurs when a country exports more than it imports  Trade deficit occurs when a country imports more t
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