AFM 132 MIDTERM EXAM QUESTIONS AND ANSWERS WITH
COMPLETE SOLUTIONS GRADED A++ LATEST UPDATE
balance of trade
The relationship between importing and exporting
favourable balance of trade (trade surplus)
When exports are greater than imports.
unfavourable balance of trade (trade deficit)
When imports are greater than exports.
business
An activity that you intend to carry on for profit (e.g., providing goods and services).
comparative advantage
Countries should sell (export) what they can produce most efficiently, and buy (import)
when they cannot.
contract manufacturing
Involves finding a foreign manufacturer to make your product and then have your own
brand name or trademark attached. Also known as outsourcing.
corporation
An incorporated business that's considered a separate legal entity apart from its
owners. Shareholders of the corporation are not personally liable for debts or acts of the
corporation.
crown corporation
, A company owned by the federal or provincial government (also referred to as publicly
owned).
embargo
A ban on the import or export of specific products or stopping all trade with a particular
country which is usually used for political reasons
exporting
The sale of goods and services to another country.
foreign direct investment (FDI)
Buying permanent property (or a business) and operating in a foreign country.
foreign subsidiary
A company that is owned by a parent company located in another country.
franchising
Where someone with a business concept (the franchisor) sells the rights to use the
business name and to sell a product or service to another party (known as the
franchisee).
free market economy
Where the market determines what goods and services to produce and who gets them.
free trade
Where goods and services can be traded between countries without any political or
economic obstruction.
importing
The purchase of goods and services from another country.
import quota
COMPLETE SOLUTIONS GRADED A++ LATEST UPDATE
balance of trade
The relationship between importing and exporting
favourable balance of trade (trade surplus)
When exports are greater than imports.
unfavourable balance of trade (trade deficit)
When imports are greater than exports.
business
An activity that you intend to carry on for profit (e.g., providing goods and services).
comparative advantage
Countries should sell (export) what they can produce most efficiently, and buy (import)
when they cannot.
contract manufacturing
Involves finding a foreign manufacturer to make your product and then have your own
brand name or trademark attached. Also known as outsourcing.
corporation
An incorporated business that's considered a separate legal entity apart from its
owners. Shareholders of the corporation are not personally liable for debts or acts of the
corporation.
crown corporation
, A company owned by the federal or provincial government (also referred to as publicly
owned).
embargo
A ban on the import or export of specific products or stopping all trade with a particular
country which is usually used for political reasons
exporting
The sale of goods and services to another country.
foreign direct investment (FDI)
Buying permanent property (or a business) and operating in a foreign country.
foreign subsidiary
A company that is owned by a parent company located in another country.
franchising
Where someone with a business concept (the franchisor) sells the rights to use the
business name and to sell a product or service to another party (known as the
franchisee).
free market economy
Where the market determines what goods and services to produce and who gets them.
free trade
Where goods and services can be traded between countries without any political or
economic obstruction.
importing
The purchase of goods and services from another country.
import quota
