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IBUS 462 EXAM 1.doc

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MARK 462
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IBUSMARK 462Environment of World BusinessFall 2013 First ExaminationStudy QuestionsBEssay Questions up to six will be chosen for the exam1 What is globalization During the recent past say 10 years what have been the major drivers of globalization Is globalization a zerosum game If so why If not why not Are Canadians better off as a result of globalization Using specific examples explain why or why notGlobalization refers to a shift toward a more integrated interdependent world economy Globalization has several facets including the globalization of markets and the globalization of production On an economic and business level globalization refers to the increased mobility of goods services labor technology and capital throughout the worldDrivers of globalization two macro factors underlie the trend toward greater globalization The first is the decline in barriers to the free flow of goods services and capital that has occurred since the end of WWII The second factor is technological change particularly the dramatic developments in recent decades in communication information processing and transportation technologiesIf globalization is a zerosum game is still debatable depending on the countryThere are many advantages of globalizationFrom a broad perspective globalizationcreates economic activity which stimulates economic growthcreates jobsraises income levelsProvides consumers with more choices in regard to the products and services that are available to them From the perspective of an individual firm globalization has the potential to increase revenues through expanded market potential drive down costs through additional economies of scale and boost profitsHowever critics argue that globalizationdestroys manufacturing jobs in wealthy countries andcontributes to pollution Critics argue thatfalling trade barriers allow firms in industrialized countries to move their manufacturing activities offshore to countries where wage rates are much lower Critics also argue that globalizationencourages firms from advanced nations to move manufacturing facilities offshore to less developed countries to avoid the more stringent pollution controls in place in their home countriesCanada is heavily connected to and dependent on the rest of the world More than twothirds of Canadians use the Internet More than twothirds of televisionviewing time is devoted to foreign programming Foreigners have invested more than 500 billion in Canada Exports mostly to the United States amount to more than 40 percent of Canadas gross domestic product GDP Canada is a member of 14 international organizations second only to the US which is a member of 15 So globalization has benefited some Canadians and hurt others who for example lost there jobs to Mexicans after the NAFTA agreement Overall Canadian efficiency competition and economy are said to be better2 Governments often intervene in international trade Identify and briefly describe four ways that governments conduct international trade intervention In your opinion why do they do this and outline why you think government intervention is a good or bad thingTariffsa tax levied on imports or exportsSubsidiesgovernment payments to domestic producerImport Quotasa direct restriction on the quantity of some good that may be imported into a countryVoluntary Export Restraints quotas on trade imposed by the exporting country usually at the request of the importing countrys governmentThe government intervenes for several reasons some of which areProtecting domestic jobs and industries from unfair foreign competition which could be operating at a lower cost than domestic industries giving them the advantage of reducing pricesNational security It is necessary to protect certain industries because they are important for national security such as aerospace industriesRetaliation Governments often use the threat to intervene in trade policies as a bargaining tool to help open foreign markets and force trading partners to play by the rules of the gameProtecting consumers from unsafe products
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