Exam 2: The Evolution of International Business

During the mid-18^th century, British economist ________, who came to be known as the father of free market and open trade systems, recognized the absurdity of Mercantilism.

_____ refers to agreements, sometimes temporary, between countries (or a group of countries)that aim at achieving certain trade outcomes.

Regulations requiring that a certain percentage of the value of import be sourced domestically refers to _______.

Foreign direct investment (FDI)in a country brings funds and business culture from abroad, creates new well-paying jobs, introduces innovative technologies, and enhances the skills of domestic workers.

T he two-way flow of exports and imports of goods is called ______.

Porter stresses the importance of domestic demand for goods and services when determining a nation's competitive advantage. When domestic demand remains high, the number of suppliers will also be high.

The decoupling of world economic order and the move to a multipolar world helps explain why China is now the world's largest recipient of FDI.

Scenario - The Audrey Firm The Audrey Firm is an international trade consulting firm currently providing its services in eight foreign nations.  The primary goal of this company is to prevent trade missteps from taking place between foreign nations conducting business with each other.  The participating nations prefer to seek counsel with this firm before any of their actions result in major international involvement or World Trade Organization intervention. In the past, the Audrey Firm's team of experts has handled international situations having the potential to create serious unrest between neighboring countries.  Their guidance and expertise have been successful in keeping trade operating freely in several areas of the globe.  The Audrey Firm is receiving an award for their exemplary service later this year in Washington D.C. As one of the Audrey Firm's more prestigious clients, OPEC, which exemplifies an export cartel, requires constant overseeing to ensure it complies with the agreement arranged for export cartels.  Which one of the following items is least likely to appear on this type of agreement?  

Defend the following statement: Trade and foreign investment are good for society.

It is estimated that for every billion dollars worth of exports from the United States _____ domestic jobs are created.

The agreement reached between Power Trip and the two foreign nations where they would sell components to Power Trip in exchange for allowing sales of its products within their borders most closely resembles which one of the following?  

As of 2013, was the world's largest economy, followed by _____ and _____.

Both the theory of comparative advantage in production and the H-O theory provide ______ as a basis for international trade.

Singapore, a regional center for global companies, continues to attract sizable amounts of foreign investment given its strategic location, world-class infrastructure, and productive workforce.

Factor price equalization theory, states that when factors are allowed to move freely among trading nations, efficiency increases, which leads to superior allocation of production of goods and services among countries.

Differentiate between H-O theory and factor price equalization theory.

Of the following statements about mercantilism, which is NOT true?

A specific tariff describes a tax on imports levied as a constant percentage of the monetary value of one unit of the imported good.

______ refers to a negative tariff or tax aimed at boosting exports.

The clients of the Audrey Firm use various techniques to restrict imports to their countries.  Which one of the following assigns a fixed amount of tax for every physical unit imported?