MGTA02H3 Chapter Notes -Per Capita Income, World Bank, North American Free Trade Agreement

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Published on 27 Jun 2012
School
UTSC
Department
Management (MGT)
Course
MGTA02H3
Professor
Chapter 5: Understanding International Business
THE RISE OF INTERNATIONAL BUSINESS
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
The Contemporary Global Economy
o Globalization has sustained because:
Govs and businesses aware of benefits of it
Tech makes travel and communication easy
Sometimes businesses must enter foreign markets to keep up
with competitors
Major World Marketplaces
o World bank uses per capita income to divide countries into one of four
groups:
1. High income countries Per capita income greater than US $10 065
(Ex: US, Canada, Australia, New Zealand, Japan, Kuwait)
2. Upper middle income countries Per capita income between $3255
and $10 065 (Ex: Czech Republic, Greece, Mexico)
3. Low middle income countries Per capita between $825 and $3255
(Ex: Colombia, Thailand, India, China)
4. Low income countries (Developing Countries) Less than $825 (Ex:
Somalia)
o North America
o Europe
Western Europe > Eastern
Eastern been affected by government instability (Russia,
Bulgaria, etc)
o Asia Pacific
Forms of Competitive Advantage
o Absolute Advantage Nation’s ability to produce something more
cheaply or better than any other country
o Comparative Advantage A nation’s ability to produce some products
more cheaply or better than it can others
o 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
International competitiveness The ability of a country to
generate more wealth than its competitors in world markets
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Document Summary

Imports products that are made or grown abroad and sold in canada. Globalization the integration of markets globally. Exports products made or grown in canada that are sold abroad. The contemporary global economy: globalization has sustained because: Govs and businesses aware of benefits of it. Sometimes businesses must enter foreign markets to keep up. Eastern been affected by government instability (russia, International competitiveness the ability of a country to generate more wealth than its competitors in world markets. Other transactions money spent by tourists, on foreign aid, buying/selling of currency on intl money. Ex: us dollar always higher than cdn but cdn was fairly high; Canadians would go to states to shop; then cdn dollar dropped; americans came here to shop. Social and cultural differences: language barriers (product names, physical stature of people, behavioral differences. Economic differences: government involvement in certain industry or not, type of gov (command, market) Legal and political differences: quota"s, tariffs, and subsidies.

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