Fill in the blanks of each statement below with the correct term from the following word bank. Global sourcing Protectionism Inflation

Franchise

Trade sanctions Hard currencies Value added Trade quota Gross Domestic Product (GDP) Joint Venture Floating rate Soft currencies Licensing Agreement Trade embargo Terms of trade Foreign Subsidiary Currency devaluation World Trade Organization (WTO)

1. A ___________________ ______________ is an exchange rate that is NOT fixed in relation to other currencies.

2. The theory or practice of shielding domestic industries from foreign competition, often through trade barriers such as tariffs is known as __________________________.

3. The total goods and services produced in one country in one year is known as ______________ __________________________ ________________________.

4. A ________________ ________________ is a government-imposed limit on the amount of product that can be imported in a certain period of time

5. The process of buying equipment, capital goods, raw materials, or services from around the world is known as ___________________ ________________________.

6. The decrease in value of a currency because the supply of that particular currency is greater than the demand for it is termed _____________________ ________________________.

7. An agreement that grants permission to a company to use a product, service, brand name, or patent in exchange for a fee or royalty is known as a ______________________ ______________________.

8. ______________ is an increase in prices accompanied by a decrease in the purchasing power of money.

9. ___________ ________________ is a currency belonging to a country with an economy that is small, weak, or that fluctuates often, and is difficult to convert into other currencies.

10. A ___________________ is an agreement granted to an individual or group by a company to use that company's name, services, products, and marketing; offers the most support

11. A common type of international business, in which a new company with shared ownership is formed by two businesses, one of which is usually located in the country where the new company is established is known as a ______________ __________________.

12. ____________ _______ ______________ is defined as the ratio between prices paid for imports and those received for exports.

13. A ____________ ____________ is a government-imposed ban on trade of a specific product or with a specific country. Often declared to pressure foreign governments to change their policies or to protest human rights violations.

14. An international organization established in 1995 (which now has more than 160 member countries) that promotes trade liberalization throughout the world is known as _____________ _____________ ________________________.

15. _____________ ________________ is the amount of worth that is added to a product at each stage of processing. The difference between the cost of the raw materials and the cost of the finished goods.

16. When a country decides to implement _____________ ________________, it's choosing to take economic action to coerce (or persuade) another country to conform (follow) to an international agreement or norms of conduct.

17. Often referred to as a wholly owned subsidiary, a ________________ _____________________ is a branch of a company that is run as an independent entity in a country outside of the one in which the parent company is located.

18. __________ _______________ are stable currencies, such as the euro, and the U.S. and Canadian dollars, which are easily converted to other currencies on the world exchange markets.

Answer the following questions

1. List three reasons why countries import and export products. 2. State two reasons Canadians invest.

3. Explain the concept of value added. Why is it so important for Canada's success in International Business? 4. Define and explain the benefits of a franchise. Give two examples of a franchise. 5. What is a tariff, and why do governments impose them? Who "wins" and who "loses"? 6. A Canadian manufacturer of bicycles is planning to expand its operations into India. Which form of international business would you recommend and why? (e.g. Franchise, Joint Venture, Foreign Subsidiary) 7. Identify one "winner" and one "loser" of a low Canadian dollar? Explain. 8. Your business is located in Toronto, and you are negotiating a purchase with a supplier in Moscow, Russia. Moscow is 7 hours ahead of Toronto. It's 10:00 a.m. your time, you discover that you need information about a costing quotation. Should you phone or email the supplier? Explain your choice. 9. Provide an example of how an individual or company might engage in currency speculation.

10. Sara is preparing for a three-week trip to the United States, Mexico, and France.

a) She has budgeted $2,400 CAD for her trip and is looking to convert $800 into each local currency before she leaves. Use the conversion chart below to calculate how much she'll receive in each currency.

b)Upon return, Sara has $120 USD, 1,200 pesos, and 80 euros left over that she'd like to convert them back into Canadian dollars. She notices that, while she was away, exchange rates have changed. Calculate Sara's remaining budget after converting back to Canadian currency. [8 marks - APP]

**Show calculations**

Currency	Rates BEFORE trip	Rates AFTER trip
United States Dollar	0.75 USD	1.32 CAD
Mexican Peso	14.62 Peso	0.069 CAD
Euro	0.685 Euro	1.47 CAD

BEFORE the trip	AFTER the trip

11. A Canadian company can produce a desk using $120 worth of raw materials and $60 worth of labour, and shipping costs will be $10. An Italian company can produce the same desk using $120 of raw materials and $60 for labour, with $20 for shipping. Assume that the Canadian tariff for imported furniture is 50%. The Canadian retailer has a markup of 100%. Complete the table below by first filling in the missing categories in the first column. Calculate the price of the Canadian desk and compare it with the price of the Italian desk BEFORE and AFTER the tariff.

[10 marks - APP]

Before Tariff	Categories	Canadian Manufacturer	Italian Manufacturer
Total
Selling Price ($)
	Categories	Canadian Manufacturer	Italian Manufacturer
After Tariff
Total
Total
Selling Price ($)