Question 1

Canada is considered the global leader in many high-value industries. Which of the following is NOT one of those industries that Canada is a global leader in?

Accepted Answer

Canada is known for being a global leader in financial services, telecommunications, and technology development. While agriculture is an important industry for Canada, it is not necessarily considered a global leader in this field.

Question 2

China exports electronics to countries all over the world. Suppose the value of the Chinese yuan increases relative to other countries' currencies. What is the likely result?

Accepted Answer

If the Chinese yuan increases in value, this makes Chinese electronics more expensive for other countries to buy. This would make it less appealing for other countries to buy from China, and therefore China would likely export fewer electronics.

Question 3

If the value of the Taiwan dollar increases relative to other currencies, which of the following would you expect?

Accepted Answer

When the Taiwan dollar increases in value, Taiwanese goods become more expensive for foreign buyers, leading to a decrease in exports. Conversely, imports become cheaper for Taiwan, so imports are likely to increase.

Question 4

Canada imports trillions of dollars of goods per year. What is a benefit of importing for Canada?

Accepted Answer

Importing allows Canada to shift its production resources to higher-value activities, enhancing economic efficiency and potentially leading to better economic outcomes.

Question 5

How has international trade changed in the last several decades?

Accepted Answer

International trade has increased substantially in the last several decades due to globalization, advancements in technology and transportation, and trade liberalization efforts such as free trade agreements.

Question 6

When a chain of organic coffee shops in Vancouver purchases coffee from Colombia, it is doing which of the following?

Accepted Answer

The chain of organic coffee shops in Vancouver is importing coffee from Colombia, as it is bringing the coffee into the country to sell in its shops.

Question 7

Suppose the value of the Thai Baht decreases substantially in value compared to the Canadian dollar. What is the likely result?

Accepted Answer

When the value of the Thai Baht decreases compared to the Canadian dollar, Thai goods become cheaper for Canadians, likely increasing Thai exports to Canada. Conversely, Canadian goods become more expensive for Thais, likely decreasing Thai imports from Canada.

Question 8

In 2014, Canada imported $2 billion in computers. As a result of these imports, Canadian consumers had a ________ variety of computers to choose from and likely paid a ________ price than if the computers were produced in Canada.

Accepted Answer

Imports allow for a larger variety of products to be available for consumers to choose from, and often result in lower prices due to competition in the market.

Question 9

Absolute advantage is the ability to produce a specific product more efficiently than any other country. Canada has an absolute advantage in which of the following?

Accepted Answer

Canada has a large amount of land suitable for agriculture and a favorable climate, which gives it an absolute advantage in producing wheat. Canada is one of the world's top wheat producers and exporters. Oranges are more likely to be grown in warmer, southern countries, while water and copper are not specific products with an absolute advantage for Canada.

Question 10

China has become a dominant exporter of electronics to Canadian and European markets. What is a direct effect of China's growth in exports?

Accepted Answer

China's growth in exports means that more goods are being produced and sold, which leads to an increase of jobs and income in China. As China becomes a dominant exporter to Canadian and European markets, they are able to capture a larger share of the global market, leading to further economic growth and prosperity for the country.

Question 11

A small country in Central America previously produced all of its own clothing because it has a strong textiles industry. Recently, it began importing clothing from Philippines, Vietnam, and Bangladesh. What is the likely result for the importing country?

Accepted Answer

By importing clothing from other countries, the Central American country is likely shifting resources away from its own textile industry. This may allow the country to focus on developing other higher value industries, such as technology or tourism, that can bring in more revenue than the textile industry. While there may be some short-term effects on clothing prices and exports, the long-term benefits of shifting resources towards more profitable industries could outweigh these drawbacks.

Question 12

Exchange rates between countries are usually determined by which of the following?

Accepted Answer

Exchange rates between countries are usually determined by a number of factors including interest rates, inflation, and imports/exports for the countries. The value of a country's currency is affected by many economic and political factors, which can create fluctuations in exchange rates. For example, if a country has high inflation, it may experience a decrease in the value of its currency relative to other countries. Similarly, a country with a strong economy and low inflation may see an increase in the value of its currency. The exchange rate between countries is usually determined by a combination of these factors.

Question 13

Suppose the Canadian dollar is strong relative to the euro. Which of the following would one expect to see regarding imports and exports?

Accepted Answer

When the Canadian dollar is strong relative to the euro, it means that Canadians can buy more goods from Europe for the same amount of money, leading to an increase in imports to Canada. Conversely, Canadian goods become more expensive for Europeans, leading to a decrease in Canadian exports.

Question 14

The United Kingdom sells industrial supplies to many nations around the world. The United Kingdom is engaging in which of the following practices?

Accepted Answer

When a country sells its products to other nations, it is engaging in exporting, which is the act of sending goods or services from one country to another for sale.

Question 15

Companies that purchase calculators in Taiwan and have them shipped back to Canada for resale are engaging in which of the following practices?

Accepted Answer

The practice described involves bringing goods from one country into another, which is known as importing.

Question 16

Suppose that last year it cost 1000 British pounds to buy a Canadian-made bicycle from Canada. Due to changes in the currency exchange rate, a few months later the same bicycle cost only 800 British pounds to purchase. What will be the likely result of this change?

Accepted Answer

The decrease in the cost of the Canadian-made bicycle in British pounds makes it cheaper for British consumers to buy them, resulting in an increased demand for imports of these bicycles to Great Britain.

Question 17

Suppose the Australian dollar increases substantially in value relative to other currencies. What is the likely result?

Accepted Answer

When the Australian dollar increases in value relative to other currencies, Australian goods become more expensive for foreign buyers, leading to a decrease in exports. Conversely, foreign goods become cheaper for Australian consumers, leading to an increase in imports.

Question 18

As Canada increases exports of aircraft, one might expect which of the following?

Accepted Answer

Increased exports of aircraft would likely lead to increased jobs and income in Canada, as the production and sale of aircraft is a high-skilled and high-value industry. While access to resources may be important for manufacturing aircraft, it is unlikely to have a significant impact on exports. Likewise, the prices of aircraft are likely to be determined by global market forces rather than Canada's level of exports. Shifting production resources to higher-value products may be a result of increased exports, but it is not necessarily a direct consequence.

Question 19

What are two benefits of importing?

Accepted Answer

Importing often leads to increased competition and allows for a wider variety of products to be available to consumers, which leads to more consumer choice. Additionally, importing can often result in lower consumer prices as imported goods can be produced more efficiently in other countries with lower labor and production costs.

Question 20

Which term describes the practice of purchasing products from other nations and bringing them into your country?

Accepted Answer

Importing is the practice of purchasing products from other nations and bringing them into your country.

Quiz 3: Exploring Global Business