BA10-Mod5Lect4 Notes - Module 5 Lecture 4 4/25 Global...

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Module 5 Lecture 4 4/25 Global Business & Entrepreneurship Questions In theory, when a country’s currency weakens, imports should drop. But, this may not happen if… B. Consumer demand for imports is price inelastic What is true about “world products” acc ording to lecture? C. Promise of world products has not been fulfilled in the auto industry Definition of Terms: Tariff Tariff tax imposed by importing nation when goods pass in Tariff in US not bad, only 15% Protectionist tariff o Country wants to protect goods made at home o Ex. Car to Costa Rica Non-Tariff Restrictions on Trade Subsidies o China bank loans as de facto subsidy o Airbus, government involved gave it loans of $1 billion each Quotas o Ex. on textile goods o Only import certain number of certain classes of goods Voluntary quota Embargo o Japan and US beef: want to sell Kobe beef at $10, not $5 Structural Barriers o Ex. Japan kiretsu firms join together, only buy within the group Structural Barriers India moving towards free trade o Some T-shirts come from India, some from Vietnam o Wal-Mart cannot open store there
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