Textbook Notes (270,000)
CA (160,000)
UTSC (20,000)
MGT (800)
MGTA01H3 (600)
Chapter 5

Chapter 5 notes (What I used to study for final)


Department
Management (MGT)
Course Code
MGTA01H3
Professor
Chris Bovaird
Chapter
5

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CHAPTER 5
Globalization: the integration of markets globally
Imports: products that are made or grown abroad and sold in Canada
Exports: Products made or grown in Canada that are sold abroad
- Global trade dates back to 2000 BCE, when North Africans traded wit the Middle East
- Countries encourage international trade
- Easier access to international travel makes it more common
- Competitive pressure to keep up with competitors causes it as well
- three major world market places: North America, Europe and Asia-Pacific
Per capita income: the average income per person of a country
High income countries > 10 065 USD
10 065USD > Upper middle income > 3255 USD
3255 USD > Lower middle income > 825 USD
825 USD > Low income
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North America: America dominates the region. Canada and America are each others biggest
trading partners. Mexico plays role because of cheap labour. A lot of automotive plants are in
Mexico.
Europe: Many internet and software manufacturers throughout the continent
Asia-Pacific: Japan dominates the region. Booming electronic industries
Absolute Advantage: a nations ability to produce something more cheaply or better than any
other country
(Canadian Timber, Saudi Oil, Brazillian Coffee Beans)
Comparative Advantage: a nations ability to produce some products more cheaply or better than
it can others
(Canada has a comparative advantage in farming because of fertile land and temperate climate)
National Competitive Advantage: a country will be inclined to engage in international trade when
factor conditions, demand conditions, related and supporting industries, and
strategies/structures/rivalries are favourable.
i) factor conditions re factors of production
ii)demand conditions reflect a large domestic consumer base that promotes strong demand
for innovative products
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iii) related and supporting industries include strong local or regional suppliers and/or
industrial consumers
iv) strategies, structures, and rivalries refer to firms and industries that stress cost reduction,
product quality, higher productivity, and innovative new products
International competitiveness: the ability of a country to generate more wealth than its
competitors in world markets.
Balance of Trade: the difference in value between a countrys total exports and its total imports
Trade Surplus: occurs when a country exports more than it imports
Trade Deficit: occurs when a country imports more than it exports
Balance of Payments: the difference between money flowing in to and out of a country as a result
of trade and other transactions
(money spent by tourists, buying and selling of international currencies on the market)
- unfavourable balance is more money flowing out than in
- to have a favourable balance of payments:
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