AFM 131 - REVIEW EXAM QUESTIONS AND ANSWERS WITH
COMPLETE SOLUTIONS VERIFIED
What is globalization?
the process by which businesses or other organizations develop international influence
or start operating on an international scale.
Why do businesses go global?
To access new customers, expand customer base and market share, better economics
of scale.
What are some opportunities of joining the global market?
Drives innovation, increased access to global resources, greater profit.
What are some challenges of joining the global market?
Job losses, cultural differences (laws, ethics, etc.,), 24/7 time zones.
What is free trade?
The ideal scenario of moving goods and services between countries without political or
economical obstruction.
Why is trade essential?
Because no one country can produce all goods and services it's people need.
Trades allow;
The imports of not locally available goods/services, and the exports of produce beyond
a countries ability to consume.
What is Canada's trade experience?
, n/a
What is exporting?
The process of selling products (goods and services) to another country.
What is importing?
The process of buying products (goods and services) from another country.
What is balance of trade?
the relationship between exports and imports.
What is the balance of payments?
The difference between money coming into a country (from exports), and the money
leaving (from imports)
What is a favorable balance of trade?
when a country exports more than it imports (trade surplus: exports > imports)
What is unfavorable balance of trade?
When a country imports more than it exports (trade deficit: exports < imports)
What is plus money considered to be?
Money inflow from activities such as tourism, foreign aid, military expenditures, and
foreign investment, etc.,.
What are the strategies of entering the global market?
Licensing, Exporting, Franchising, Contract manufacturing, International joint ventures
and strategic alliance, and Foreign Direct Investment.
What is licensing?
a contractual agreement where a company (licensor) allows a foreign company
(licensee) to produce and sell its product for a fee (a royalty)
COMPLETE SOLUTIONS VERIFIED
What is globalization?
the process by which businesses or other organizations develop international influence
or start operating on an international scale.
Why do businesses go global?
To access new customers, expand customer base and market share, better economics
of scale.
What are some opportunities of joining the global market?
Drives innovation, increased access to global resources, greater profit.
What are some challenges of joining the global market?
Job losses, cultural differences (laws, ethics, etc.,), 24/7 time zones.
What is free trade?
The ideal scenario of moving goods and services between countries without political or
economical obstruction.
Why is trade essential?
Because no one country can produce all goods and services it's people need.
Trades allow;
The imports of not locally available goods/services, and the exports of produce beyond
a countries ability to consume.
What is Canada's trade experience?
, n/a
What is exporting?
The process of selling products (goods and services) to another country.
What is importing?
The process of buying products (goods and services) from another country.
What is balance of trade?
the relationship between exports and imports.
What is the balance of payments?
The difference between money coming into a country (from exports), and the money
leaving (from imports)
What is a favorable balance of trade?
when a country exports more than it imports (trade surplus: exports > imports)
What is unfavorable balance of trade?
When a country imports more than it exports (trade deficit: exports < imports)
What is plus money considered to be?
Money inflow from activities such as tourism, foreign aid, military expenditures, and
foreign investment, etc.,.
What are the strategies of entering the global market?
Licensing, Exporting, Franchising, Contract manufacturing, International joint ventures
and strategic alliance, and Foreign Direct Investment.
What is licensing?
a contractual agreement where a company (licensor) allows a foreign company
(licensee) to produce and sell its product for a fee (a royalty)
