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University of Toronto Scarborough
Management (MGT)
Chris Bovaird

MGTA03 - Intro to Management Fall 2008 MANAGEMENT Sample SAQ Practise Questions Question 1 In spring of 2008, the Canadian dollar was worth approximately 94 US cents (i.e. Cdn$1 = US$0.94). Now the Canadian dollar is worth approximately 80 US cents (i.e. Cdn$1 = US$0.80). How is this change likely to have affected Canada‘s balance of trade with the United States? Explain and justify your answer. Answer 1 - Approach and Guidance The question is asking how fluctuations in the value of currency affect the balance of trade. To answer this question, consider -- If the value of the Canadian dollar rises, what effect does that have upon the cost of Canadian dollars in foreign countries? What if the dollar falls? -- What effect would that have upon the cost of Canadian exports to such foreign countries? -- What effect does an increase in the cost of goods have on the amount of such goods sold? What effect does a decrease in the cost of goods have on the amount of such goods sold? -- How does the change in the amount of goods sold overseas affect the Canadian balance of trade? Remember to work through the answer logically and completely. The question asks how a change in currency affects the balance of trade. Work out all the implications until you have an answer. Question 2 It is often said that ―war is good for the economy‖. How would someone justify this statement? Answer 2 - Approach and Guidance To answer such a question, ask yourself, ―What would be good for the economy?‖ You then ask ―What does it mean to be ‗good‘ for the economy?‖ Once you know what is good for the economy, you have a way of assessing what is good and what is not good for the economy. Then ask ―What effect does war have on the economy?‖ You may assume that the war is somewhere else and that economy is not destroyed by the war. What effect does a war have on an economy? Use the standard for ―goodness‖ to assess why war might be good for an economy. What sectors of the economy benefit from a war? Which ones do not? Or you may not assume the war is somewhere else – it affects the country directly because the war is being fought in that country. You can always disagree with assumptions, noting why people ―say‖ that war is good but also noting that it is not good if the whole economy is ruined during the war. Question 3 Define ―globalization‖ and identify the causes of increasing globalization over the past decade. Answer 3 - Approach and guidance The definition comes right out of the textbook. But can you add anything useful to it? It is fine to cite the text definition, but you might gain some extra credit if you have thought about this a little and can add something. After all, the point of these questions is not only to show that you know the text and lecture material, but also that you have thought about it. Why has globalization increased since 1998? The text gives you some reasons. Again, can you think up some more? Has globalization resulted from better communications technology? Has it resulted from changes in government in countries like China that have opened up economies that were once closed? From a global pressure to produce more efficiently by reducing labour costs? Think about the material as you read it, and try to create a more thoughtful answer to questions like this. Anyone can memorize – you show you really understand this material w
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