COMMERCE 1E03 Chapter Notes - Chapter 3: Offshoring, Devaluation, Protectionism
17 Jan 2017
School
Department
Course
Professor
Document Summary
Canada is a market of 35. 7 million people, while there are 7 billion potential customers in the global market. Canadian companies face aggressive rivalry from exporters around the world. Global trade enables a nation to produce what it produces best, and to buy what it needs from others in a mutually beneficial exchange relationship. Free trade - movement of goods and services among nations without political or economic barriers. Productivity improves when countries utilize their comparative advantage. Countries have access to foreign investments, keeping interest rates low. Domestic workers can lose their jobs, or be forced to accept pay cuts. Domestic companies can lose comparative advantage when competitors build advance production operations in low-wage countries. Comparative advantage theory - country should sell to other countries products that it produces effectively and efficiently, and buy the other products. An example would be japan and their ability with cars and electronic items.
