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Full Notes for Midterm & Final

Full Notes for Midterm & Final - Chapter 1 Canadas...

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Chapter 1: Canada’s Global Competitiveness Competitiveness “The ability to design, produce and market goods and services, the characteristics of which form a more attractive package than those of competitors.” Used to be defined in terms of domestic perspective, but now must be defined in terms of role in the global marketplace, gaining export markets, and defending against competitors domestically Competitiveness is not driving down costs, hollowing out corporations, outsourcing, reducing wages, etc. Goals of competitiveness: to increase wealth, gain personal freedoms, increase security, better the quality of life Achieve competitiveness: through productivity enhancement through innovation, superior technology, skill-enhancing training, social equity, environment preservation Paul Krugman: argues that countries do not compete with each other, they trade to increase productivity; competition concept can lead to poor government policies such as protectionism Economic Growth Theories Post WW2 : Domar and Harrod; economy’s output depends on its capital investment and savings Neoclassical : Solow and Swan; economy’s output depends on its inputs of capital and labour as well as their efficiency; assumes perfect competition and the law of diminishing returns, so that each addition of capital will yield a smaller amount than the one before; technology must increase as capital increases to prevent diminishing returns; poorer nations should grow quicker since they have a lower capital base and they should receive higher yields from each new unit of investment New Growth : Lucas and Romer; puts the variable technology explicitly in the model, and emphasizes labour; believes in increasing returns to knowledge-based investment (each additional dollar invested in knowledge will yield more than the previous dollar invested) Measuring Global Competitiveness Factor Models : ranks nations according to several factors and compares them; Canada ranked 7 th overall Domestic economic strength: incomes, GDP, manufacturing, interest rates, unemployment—12 th Internationalization: degree of international trade, investment, worldwide marketing, global share of goods and services, foreign direct investment—24 th o Significant portion of our exports are “tied”, which means trade occurs on an intracorporate basis, not that one company is marketing goods to another one; an example is automobiles at Ford plant in Canada going to a Ford plant in US for sale Government: policies and position on international competition—12 th
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Finance: financial markets, loan availability—11 th Infrastructure: telecommunications, natural resources, energy—8 th Management: entrepreneurial drive, customer orientation, product and service capability, business efficiency—8 th Science and technology: research and development, intellectual capital, innovative activities—13 th People: education, attitudes, employment characteristics, social services—7 th Trade Performance
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