Business final exam review

Part B: Short Answer Questions 1. Discuss the advantages and disadvantages of international business to different stakeholders. (6 marks) (choose 1 advantage and 1 disadvantage for all) 1. Firms/Companies: a. Advantage: Access to new markets and diverse customer bases. b. Advantage: Opportunities for economies of scale and cost efficiencies through global production and sourcing. c. Advantage: Diversification of risks by operating in multiple markets. d. Disadvantage: Exposure to currency exchange rate fluctuations. e. Disadvantage: Complexity in managing operations across diverse cultural and legal landscapes. f. Disadvantage: Political and economic instability in foreign markets can pose risks. 2. Employees: a. Advantage: Increased job opportunities and career growth prospects. b. Advantage: Exposure to diverse work environments and cultures. c. Disadvantage: Job insecurity due to potential outsourcing or restructuring. d. Disadvantage: Cultural and language barriers can create challenges in the workplace. 3. Consumers: a. Advantage: Access to a wider variety of products and services. b. Advantage: Competitive pricing due to increased market competition. c. Disadvantage: Loss of local businesses d. Disadvantage: Quality control issues or differences in product standards across borders. 2. Discuss factors influencing a company’s decision to import/export. (6 marks) 1) Market Demand: Companies may choose to export if there is a significant demand for their products or services in international markets. Conversely, importing might be attractive if there's a demand for foreign goods domestically. 2) Cost Considerations: The cost of production, labor, and raw materials can significantly impact a company's decision. Importing may be chosen if raw materials or production costs are lower abroad, while exporting may be pursued to take advantage of higher prices in foreign markets. 3) Global Competition: The level of competition in both domestic and international markets influences a company's decision. Companies may engage in international trade to stay competitive globally and to gain access to a wider customer base. 3. Calculate GDP per capita and discuss the significance of this economic measure. (7 marks) To calculate GDP per capita, the total GDP of an economy is divided by the population . For example, Country A has a GDP of 100 million US dollars and a population of 8000. •The GDP per capita would be 100 000 000 divided by 8000, and that is 12 500.

GDP per capita is a useful statistic because, in most cases, the larger the population of a country, the larger its GDP. When economists try to determine if a country is ‘prosperous’, the most commonly used indicator is GDP per capita. The reason this is such an important indicator is that higher economic output is usually associated with higher household incomes. Higher incomes mean families can spend more on the things they value, such as affording groceries and rent without financial stress, getting dental care, sending their children to university, etc. It also shows the government's capability to provide public services such as healthcare and education. 4. Calculate Currency Exchange (2 marks) When converting CAD(Canadian dollars) into other currency, multiply with the rate that will be given. When converting other currencies into CAD, divide by the rate of that country's currency given. (Look at the Chapter 2 test PART B question 1) 5. Tariff Calculation (2 marks) Divide the tariff percentage by 100, then multiply it by the amount mentioned. (Look at the Chapter 2 test PART B question 2) 6. Balance of Trade Calculation (2 marks) Subtract value of a country’s imports from the value of its exports. Part C: Short Answer Questions 1. Discuss the impact of globalization on developing nations. (5 marks) Positive impact: ● Better jobs: export jobs require higher education and a high skill level therefore these workers are paid more. ● Access to Technology: Globalization facilitates the transfer of technology from developed to developing nations, enabling them to adopt advanced methods of production and improve efficiency. ● Education Opportunities: Globalization provides access to educational resources and opportunities, allowing people in developing nations to acquire new skills and knowledge. negative impact: ● The exploitation of cheap labor: children, prisoners, and the uneducated are forced to work in substandard conditions. ● Environmental concerns: pollution is increased because the developed countries move their factories to the developing countries to cut down costs, as they have limited pollution regulations. ● Income Inequality: the wealth generated from globalization may not be evenly distributed, leading to a growing gap between the rich and the poor.