[TEA-BG] BBB4M Inter ...

Q1: GM makes and sells cars in the US. Should they pay attention to the international market or just the US market? Why?

They need to pay attention to the international market because cars use gasoline, and gasoline is imported. If they noticed that the price of gasoline goes up every now and then, which reduces consumer demand for big cars, GM could’ve prevented their bankruptcy.

Q2: What will happen to the price of imported goods as developing countries such as China and India get richer?

They will get more expensive because those countries will have more middle-class consumers, increasing domestic demand, which limits the amount they can export.

Q3: How did the 2008 US financial crisis lead to a downward spiral in the economy?

Banks lent out subprime mortgages to people who shouldn’t qualify for mortgages. They did so because they thought housing prices would keep going up.

Then when housing prices went down, people owed even more money which they couldn’t afford. For example, let’s say a family bought a house for $500,000, and they paid nothing at the beginning. That means they still owe $500,000 to the bank. If they know they can sell the house for at least $500,000, then no one is worried.

But then the house price drops to $300 thousand. Also, the price of oil increased, so everything got more expensive. Uh-oh. How is the family supposed to pay back the $500,000 to the bank? They can’t. So they default on the mortgage and give the house keys back to the bank. The bank loses money. The family loses their house. It’s lose-lose.

Since families can’t pay the bank, they don’t buy anything. So the economy goes into a recession. Companies have to fire people to save costs. People lose jobs have no money, so demand goes down even more.

Q4: How did the 2008 US financial crisis affect Canada?

Canada’s exports to the US decreased because their economy was bad.

Q5: How has international labor affected the workforce in developed countries?

International labor has reduced the power of unions in developed countries. It also increases the unemployment rate because companies outsource labor to cheaper countries.

Q6: What percentage of US workers were unionized in 1960 versus 2010?

1960 – 35%

2010 – 13%

Q7: What is the Green Revolution? How has Germany responded to it?

The Green Revolution is the trend towards renewable energy sources, such as wind, solar, and hydro.

Germany implemented a feed-in tariff to guarantee business success for companies in the renewable energy sector.

Q8: How does reducing carbon footprint affect international business?

Reducing carbon footprint would reduce international business because people would need to buy locally, buy less, and buy wisely.

Q9: How does border security affect international business?

High security costs increase the cost of transportation of foreign goods, which increases the price of foreign good.

International business travelers have to deal with higher costs of air travel and longer wait times at airport security.

Q10: Why does the price of oil affect the global economy so much? Give examples of products that use oil.

We use oil a lot in our everyday lives. For example

· Gasoline for cars

· Home heating

· Plastic

· Nylon

· Fertilizer (and therefore groceries)

· Wax and adhesives (and therefore all packaged-products)

· Cosmetics

Q11: Is farmed shrimp a solution to the global demand for shrimp? Why or why not?

No, because shrimp farms destroy local forests and pollute coastlines. They also remove shrimps from the local ecosystem, so fish that eat shrimp are affected, and animals that eat those fish are affected, and animals that eat those animals are affected, and the effect goes on and on.

Ultimately, damaging the environment hurts everyone in that environment, including humans.