International Interdependence

International interdependence Absolute advantage 

An advantage that a country enjoys when dealing in goods and services if it is the only country that can provide the good or service

Comparative Advantage: 

An advantage in producing one good or service rather than another

**** IF absolute advantage does not exist, comparative advantages can be very important factors in planning and decision-making****

Factors to consider     

Population Climate Resources Infrastructure Supply of energy

Balance of Trade  The relationship between a country’s total imports and total exports  Imports- are goods and services flowing into Canada  Exports – flowing out of Canada  Trade deficit – a country that pays more for imports than it earns from exports Trade surplus – a country that earns more from exports than it pays for imports International Trade Why would a country decide to trade? 1. Product -Canada cannot produce all the goods and services it needs Examples Bananas -We have an excess of some goods. Example: Amazing high school teachers (?), Wood, and other natural resources. 2. Proximity -Counties close to each other can develop relationships. Therefore, trade of goods and services increase. Example: Canada and the USA. 3. Preference -Canadians often demand goods made in other countries that they deem high in quality. Example: Swiss watches, Belgium chocolate

4.Promotion - Companies promote their products all around the world. Therefore, they sell goods/services all around the world. -Increased sales and profit. Example: McDonalds 5. Price -Some products from other countries are made cheaper (lower wages, availability of material, etc.) Example: Clothing from South East Asia