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Chapter 3

COMMERCE 1B03 Chapter Notes - Chapter 3: Canada Border Services Agency, Tim Hortons, Absolute Advantage

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Rita Cossa

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Chapter 3 - Competing in Global Markets
exporting - selling products to another country
importing - buying products from another country
free trade - the movement of goods and services among nations without political or economic
comparative advantage theory - a theory that states that a country should sell to other countries
those products that it produces most effectively and efficiently, and buy from other countries
those products that it cannot produce as effectively or efficiently
absolute advantage - the advantage that exists when a country has a monopoly on producing a
specific product or is able to produce it more efficiently than all other countries
The Canada Border Services Agency deals with importers across the whole range of goods and
services that enter our country. These products are subject to compliance with certain conditions
imposed by the federal/provincial gov'ts.
balance of trade- is a nation's ratio of exports to imports
trade surplus - occurs when the value of the country's exports exceeds that of its imports
trade deficit - an unfavourable balance of trade; occurs when the value of a country's imports
exceeds that of its imports
the goal is always to have more money flowing into the country rather than out of the country
the key strategies to compete in global markets include licensing, exporting, franchising,
contract manufacturing, creating international joint ventures and strategic alliances, and
engaging in foreign direct investment.
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