International Business Concepts and Global Trade Dynamics
Fundamentals of International Business
Core Business Definitions
- Business: The manufacture and sale of goods and services (G&S) to satisfy the wants and needs of consumers to make a profit.
- Transaction: An exchange of things of value.
- Domestic Business: A business making most of its transactions within the country in which it is based.
A domestic business in Canada is typically:
- Owned by Canadians.
- Relies on Canadian products and services (P&S).
- Sells products and services to Canadians.
- International
Economic Concepts: Market Failure, Cycles, and State Intervention
Understanding Market Failure
Market failure is a negative consequence of market performance that occurs when the market is inefficient in allocating resources. The major flaws leading to market failure include:
Major Flaws Leading to Market Failure
- Economic Cycles: The market fails to maintain stable growth, leading to periodic crises and the existence of economic cycles.
- Public Goods: The market often fails to provide the necessary quantity of public goods that society needs, requiring state intervention.
Advanced Macroeconomic Formulas and Policy Concepts
Core Macroeconomic Identities and Inflation
The Quantity Identity of Money
The Quantity Identity of Money is expressed as: M × V = P × Y
- M = Money Supply
- V = Velocity of Money
- P = Price Level
- Y = Real GDP
- P × Y = Nominal GDP
Calculating Inflation and Growth Rates
To calculate inflation, multiply new prices by the total number of old goods.
The growth rate form of the Quantity Identity is: m + v = π + y
- m = Money supply growth rate
- v = Velocity growth rate
- π (pi) = Inflation rate
- y = Real GDP growth rate
Assuming
Read MoreCore Principles of International Trade and Finance
Benefits and Disadvantages of Specialisation
Advantages of Specialisation
- Increased Output: As production becomes more efficient, output is maximised with the same amount of resources.
- Greater Variety for Consumers: Consumers gain access to a greater variety of higher-quality products from around the world.
- Economic Growth: Specialisation and international trade increase the size of the market, allowing for economies of scale and boosting the GDP.
- Enhanced Efficiency: It leads to greater overall efficiency,
Development Economics: Key Concepts, Reforms, and Global Issues
Critical Discussion of Land Reform Measures in Developing Countries
Land reforms in developing countries, aimed at addressing inequitable land ownership and control, have seen various approaches, including redistribution, tenancy reforms, and consolidation. While these measures have been intended to improve agricultural productivity, reduce poverty, and promote social justice, their effectiveness and impacts are often debated. Critically, the successes and failures of land reforms depend on a complex
Read MoreBusiness Combinations, Mergers, and Government Regulation
What is a Business Combination?
A business combination refers to the process by which two or more companies join together to form a single entity, either by merging, acquiring, or consolidating with each other. Business combinations can take different forms, including mergers, acquisitions, amalgamations, or takeovers. The goal is often to increase market power, achieve synergies, or expand operations.
Types of Business Combinations
Business combinations can be broadly classified into the following
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