AFM131 Lecture Notes - Lecture 1: Foreign Direct Investment, Global Trade Exchange, Joint Venture

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM131
• Professor: David H A

Document Summary

Trading with other nations is done to meet the needs of its citizens. Some countries may be advanced in technology but have limited resources. Free trade movement of goods and services among nations without political or economic barriers. Domestic workers can lose their jobs due to increased imports. Domestic companies can lose their comparative advantage when competitors build their operations in lower wage countries. Global trade exchange of goods and services across national borders. States that countries should sell products that it can produce more efficiently and effectively and buy that which cannot be produced efficiently and effectively. Advantage that exists when a country has a monopoly on producing a specific product or is able to produce it more efficiently than other countries. By balance of trade and balance of payments. Balance of trade (cid:374)atio(cid:374)"s (cid:396)atio of e(cid:454)po(cid:396)ts to i(cid:373)po(cid:396)ts. Favourable balance aka trade surplus occurs when exports exceed imports. Unfavourable balance aka trade deficit occurs when imports exceed exports.