BUSI 1600U Chapter Notes - Chapter 4: General Agreement On Tariffs And Trade, International Monetary Fund, North American Free Trade Agreement

• School: Ryerson University
• Department: Business
• Course: BUSI 1600U
• Professor: Malcolm Mac Taggart

Document Summary

Business decisions to operate abroad depend on the basic factors of production in the other country: availability, price, quality of labour, natural resources, capital and entrepreneurship. Absolute advantage-when a country has a monopoly on making that product or when it can produce the product at a lower cost than any other country. Comparative advantage-when a nation can supply its products more efficiently and at a lower price than it can supply other goods, compared with the outputs of other countries. Balance of trade-the differe(cid:374)(cid:272)e (cid:271)et(cid:449)ee(cid:374) a (cid:374)atio(cid:374)"s e(cid:454)ports a(cid:374)d i(cid:373)ports: trade surplus-more exports than imports, positive balance of trade, trade deficit-more imports than exports, negative balance of trade. Balance of payments-the overall money flows into and out of a country: balance-of-payments surplus-more money has moved into a country than out of it, balance-of-payments deficit-more money has gone out of a country than entered it. Exchange rate-the value of o(cid:374)e (cid:272)ou(cid:374)tr(cid:455)"s currency in terms of the currencies of other countries.