MGTA03 - Intro to Management
Sample SAQ Practise Questions
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
-- 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.
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.
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