Industry and Trade: Test Review- Answer Key

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1 Industry and Trade: Test Review- Answer Key Definitions: Industry Primary Industry Secondary Industry Tertiary Industry Quaternary Industry Import/Export Labour Force Location Factor Incentive Branch Plant Tariff Protectionism Free Trade Multinational Corporation Trade Surplus/Trade Deficit Gross Domestic Product (GDP) Global Village Developed Country Developing Country Outsourcing Sweatshops

2 Globalization Review Questions: Industry and Trade 1. What are the 7 location factors that affect industry? Provide an explanation of each one. Availability of raw materials- manufacturers need a reliable source of raw materials, close proximity for a quick processing and manufacturing process is preferred Location of market- majority of customers nearby so shipping costs reduced, delivery of products can be done in little time Availability of fresh water and power- many industries need lots of fresh water and power to run, proximity of that reduces energy costs Labour supply- large, low budget labour is preferred to most companies, this is why companies locate over seas, manufacturers locate near schools that produce the type of workers they need Transportation- makes shipping orders fast and efficient, makes getting resources quick and efficient too Political factors- helps to attract new business, government has influence, offered reduced taxes from government Circumstance- role of the entrepreneur, where the company originally started up 2. What industry are most of Canadian workers employed in? What type of industry contributes most to Canada s GDP? What industry contributes the least? Most Canadian workers are employed in the tertiary industry because most jobs are providing a service of some sort. Tertiary contributes most to Canada s GDP. Primary contributes the least, but the primary industries of Canada are very valuable 3. Explain the concept of protectionism and how it relates to Canadian industry. How does this affect you as a Canadian consumer? Protectionism is the government policy on using tariffs and having rules that limit imports in order to preserve Canadian businesses and industries. This affects us as consumers because it encourages us to buy Canadian products instead of

3 contributing to another country s GDP and also affects the price of our products as well as restrictions on products that we have in the country. 4. What are the positives and the negatives of globalization? Will this process ultimately be good or bad for the global community? As John Green states in his YouTube videos, globalization has been a positive thing for the global community because travel and trade has become quick and cheap, the global market has grown exponentially in size, we have the luxury of getting products from around the world with ease, it has created jobs in many different countries and has also lifted many countries out of poverty. Globalization can also be seen as a negative thing for the global community because it is a direct cause of global warming, it has influenced the negativity of consumer culture, it has been bad for families and has caused the polarization of wealth. 5. What are the 7 regions of Canada? What are the major industries and exports of each area? Mountain West/Cordillera (British Columbia, Alberta)- fruit orchards, shipping transportation, fishing Arctic Islands (Northwest territories, Yukon, Nunavut)- diamonds, little to no vegetation Interior plains (Manitoba, Saskatchewan, alberta)- wheat, barley, horse and cattle ranching Canadian Shield (Ontario, Quebec, Labrador) lumber, rocks and minerals, rapids and waterfalls for hydro electric power Hudson Bay Lowlands (Ontario, Quebec)- peat St. Lawrence Lowlands (Ontario, Quebec)- largest concentration of population, farmlands, canola, cherries, waterways for transport Appalachian Highlands (Newfoundland, Labrador)- fishing, lumber, farmland 6. Explain the idea of global interdependence. What does this mean for the people of the world? Global interdependence means that all countries rely on other countries for what they need and that no country, in current times, is completely independent. Before the process of globalization each country has to be self-sufficient because

4 connections between countries were limited. Now, the idea of interdependence (relying on each other) is what holds the global community, as we know it, together. 7. Free Trade is not the same as Fair Trade. Explain this concept and why investing in Fair Trade will be good for the future of our global community. Free trade eliminates tariffs on goods being imported into a country. The elimination of tariffs and price regulation that comes with the free trade agreements makes it hard for farmers or producers of raw materials to make ends meet because they are not being paid properly for their products. Fair Trade ensures that the farmer s needs are met at that there are price regulations in place for each product. Fair trade agreements mean that the company buying the product must give back to the producers of the products as well as ensure that labour standards are being met. Fair Trade is better for the producers because it enables them to sustainably produce their product for years to come. 8. What is NAFTA? Explain the effects it has had on the North American Community. Why has NAFTA become outdated and arguably harmful in the last decade? NAFTA is the North American Free Trade Agreement. NAFTA is a trade agreement between the USA, Canada and Mexico that eliminates tariffs on imports between the countries. The implementation of NAFTA has caused many jobs to be moved across the boarder to Mexico where labour is cheaper and has caused the loss of thousands of jobs in the USA and Canada. Eliminating tariffs has also proved to be bad for the producers of raw materials as we discussed with the idea of Fair Trade. 9. Why would multinational companies choose to manufacture in developing countries? What are some negative and positive effects of multinational corporations outsourcing manufacturing? Cheap labour, lots of available workers, proximity to raw materials. Some positives for consumers are that the products made using cheap labour also become cheaper for us to buy. Some negative, as we saw in the sweatshop video, are that workers are treated unfairly, made to work in dangerous conditions and are not paid adequate wages for living. This also eliminates jobs in places like Canada and the United States. 10. What are the major manufacturing regions of the world? What are their main exports? Why are they located where they are? North America also called the rust best or manufacturing belt. Main exports of this area are automobiles, coal, iron and core. This location has proximity to raw materials, availability of workers and proximity to waterways and railroads for transportation.

5 Eastern & Western Europe - most dense around Moscow, area called Rhine-Ruhr Valley. Main exports are oil, synthetic plastic, machinery and wood. They have proximity to waterway transport, availability of workers and availability of raw materials. East Asia - main exports are textiles, automobiles and electronics. They have the availability of labour, close to waterway transportation and also has proximity to raw materials. BE ABLE TO LABEL WORLD MAP!

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