define each term and give two examples:

Importing

franchise

trade embargo

trade quotas

protectionism

foreign subsidiary

global sourcing

exporting

value added

licensing agreement

exclusive distribution rights

joint venture

trade sanctions

exchange rate

floating rate

currency revaluation

currency devaluation

terms of trade

hard currencies

soft currencies

currency speculating

KNOWLEDGE QUESTIONS

1. State five of Canada's major imports.

a)

b)

c)

d)

e)

1. State five of Canada's major exports.

a)

b)

c)

d)

e)

1. What is included in a franchise agreement?

1. Name 5 Canadian owned franchises

a)

b)

c)

d)

e)

1. Explain how standards can be a trade barrier.

1. If CAD$1.00=USD$0.89, how much would CAD$1,000 be worth in U.S. dollar?

1. Who are the winners and the losers of a high Canadian dollar?

1. What factors influence the exchange rate?

1. Why time zones are considered a barrier to international business?

1. Why do countries import and export product?

1. Explain why a company would use a licensing agreement.

1. What are the advantages and disadvantages of a franchise?

Advantages Disadvantages

a)

b)

c)

d)

e)

1. What are the advantages and disadvantages of a joint venture? List 2

Advantages Disadvantages

a)

b)

1. Why is the Canadian government against protectionism?

1. Why is the Canadian dollar trading well against the U.S. dollar?

1. How communication technology has expands international business?

THINKING QUESTIONS

1. Which of Canada's major imports provide value added? Why is this important information?

1. Which of Canada's major exports provide value added? Why is this important information?

1. One of the imports Canadians enjoy the most is fresh fruit. Explain how a Canadian's life would be altered if fruit was not imported.

1. A Canadian manufacturer of hearing aids is planning to expand into China. It is deciding between a licensing agreement, a joint venture, or a foreign subsidiary. Your advice- explain why?

1. State three Canadian businesses that lose because of a high Canadian dollar. Explain.

a)

b)

c)

1. State three Canadian businesses that win because of a high Canadian dollar. Explain.

a)

b)

c)

1. Why do companies speculate?

COMMUNICATION QUESTIONS

.

At one time, Canada considered raising tariffs on Imports from Myanmar in an effort to influence the government of Myanmar to release pro-democracy leader Akung San Suu Kyi. Suu Kyi, a Nobel peace prize winner, was a political prisoner in Myanmar military custody at the time.

1. Where is Myanmar?

1. What do you think of the Canadian government using a tariffs a political weapon?

1. Using the Internet, find out what is currently happening to Suu Kyi.

1. You are doing business with supplier in Shanghai. At 9:00 a.m. you discover that you need to find out information about a costing quotation. Should you phone or email? Explain.

APPLICATION QUESTIONS

1) A Canadian company can produce a mattress using $160 worth of a raw materials and $120 worth of labor, and shipping costs will be $27. A Chinese company can produce the mattress using $160 of raw materials and $40 for labor, with $50 for shipping. Assume that the Canadian tariff for mattresses is 50 percent. The Canadian retailer has a profit margin of 150 percent.

1. Calculate the price of the Canadian-produced, mattress.

1. Calculate the price of the Chinese-produced mattress before the tariff.

1. Calculate the price for the Chinese-produced mattress after the tariff

2) The United States issued a 300 percent tariff on all Roquefort cheese imported into the United States from France. The tariff was imposed as a penalty against France because it refused to import hormone-fed beef from the United States. Roquefort is considered the king of cheeses in France and this tariff is seen as a symbolic move.

1. Suppose a specialty cheese store in Washington imports USD $ 30,000 worth of Roquefort cheese Calculate the tariff on the cheese.

1. Who wins and who loses with the tariff? Be specific.

1. What do you think of the tactics used by the United States?

3) As a Canadian manufacturer, you have a choice to purchase raw materials from three countries. The United States is offering to sell the goods for USD $1.2million, the United Kingdom for GBP 650,000 and South Korea for KRW 1.7 billion. Use the internet to find the current exchange rate.

1. Which is the better deal?

1. Would you want the supplier to be ISO certified? Why?

1. What other considerations would you take into account when making your decision?