Question 1

David Ricardo's theory of specialization

Accepted Answer

A)  expects a country to have absolute advantage in producing goods efficiently 
B)  expects a country to have comparative advantage in producing goods efficiently 
C)  expects a country to be able to produce more labor-intensive than capital-intensive goods 
D)  expects a country to be able to produce more capital-intensive than labor-intensive goods 
A)  expects a country to have absolute advantage in producing goods efficiently 
B)  expects a country to have comparative advantage in producing goods efficiently 
C)  expects a country to be able to produce more labor-intensive than capital-intensive goods 
D)  expects a country to be able to produce more capital-intensive than labor-intensive goods B

Question 2

The Heckscher-Ohlin theorem states that a country with abundant labor resources

Accepted Answer

A)  should specialize in producing capital-intensive goods 
B)  should specialize in producing labor-intensive goods 
C)  should specialize in producing labor-intensive goods and capital-intensive goods 
D)  should specialize in producing goods with higher capital-labor ratio 
E)  should specialize in producing neither labor nor capital-intensive goods 
A)  should specialize in producing capital-intensive goods 
B)  should specialize in producing labor-intensive goods 
C)  should specialize in producing labor-intensive goods and capital-intensive goods 
D)  should specialize in producing goods with higher capital-labor ratio 
E)  should specialize in producing neither labor nor capital-intensive goods B

Question 3

Mercantilism refers to the philosophy that the cheaper the imports, the greater the savings to a country.

Accepted Answer

A) True 
 B)False  False

Question 4

The WTO reaches an agreement on new rules by consensus only.

Accepted Answer

A) True 
 B)False

Question 5

What are some of the major motives for foreign direct investment by multinationals?

Accepted Answer

The answer of What are some of the major motives...

Question 6

It is necessary for a multinational to own 100 percent of a foreign firm for its investment to be termed FDI.

Accepted Answer

A) True 
 B)False

Question 7

When a multinational purchases 20 percent shares of a company overseas

Accepted Answer

A)  it can be classified as an FDI even if it has no controlling interest 
B)  it can be classified as an FDI only if it has a controlling interest 
C)  it can be classified as a portfolio investment if it has a controlling interest 
D)  it cannot be classified as a FDI since it does not own 100 percent of the shares
E it cannot be classified as a portfolio investment because it does not own 100 percent of the shares 
A)  it can be classified as an FDI even if it has no controlling interest 
B)  it can be classified as an FDI only if it has a controlling interest 
C)  it can be classified as a portfolio investment if it has a controlling interest 
D)  it cannot be classified as a FDI since it does not own 100 percent of the shares
E it cannot be classified as a portfolio investment because it does not own 100 percent of the shares

Question 8

Discuss the Heckscher-Ohlin model's to explain for differences in international trade patterns.

Accepted Answer

The answer of Discuss the Heckscher-Ohlin model's to explain for...

Question 9

The product life cycle theory is better at explaining trade patterns ex-post rather than ex-ante.

Accepted Answer

A) True 
 B)False

Question 10

During the mature stage of the product life cycle theory, companies will begin to export their goods.

Accepted Answer

A) True 
 B)False

Question 11

Wassily Leontief showed that the the Heckshcer-Ohlin theorem

Accepted Answer

A)  was verified empirically because the United States exported more capital-intensive goods 
B)  was not verified empirically because the United States exported more capital-intensive goods 
C)  was verified empirically because the United States exported more labor-intensive goods 
D)  was not verified empirically because the United States exported more labor-intensive goods 
E)  was not verified empirically because the United States neither exported more capital- or labor-intensive goods. 
A)  was verified empirically because the United States exported more capital-intensive goods 
B)  was not verified empirically because the United States exported more capital-intensive goods 
C)  was verified empirically because the United States exported more labor-intensive goods 
D)  was not verified empirically because the United States exported more labor-intensive goods 
E)  was not verified empirically because the United States neither exported more capital- or labor-intensive goods.

Question 12

If FDI is accomplished by acquisition of a firm overseas, employment may not increase and may even decrease in the short run in the foreign country.

Accepted Answer

A) True 
 B)False

Question 13

In John Dunning's OLI paradigm

Accepted Answer

A)  O refers to the advantages of outward foreign direct investment enjoyed by multinationals 
B)  L refers to the licensing advantages available to multinationals because of the special know how 
C)  I refers to the investment advantages available to multinationals that are unavailable to domestic firms 
D)  O refers to ownership advantages in arranging efficient joint venture contracts 
E)  I refers to internalization where the multinational posses advantages in the efficient execution of projects rather than outsourcing to other firms 
A)  O refers to the advantages of outward foreign direct investment enjoyed by multinationals 
B)  L refers to the licensing advantages available to multinationals because of the special know how 
C)  I refers to the investment advantages available to multinationals that are unavailable to domestic firms 
D)  O refers to ownership advantages in arranging efficient joint venture contracts 
E)  I refers to internalization where the multinational posses advantages in the efficient execution of projects rather than outsourcing to other firms

Question 14

Recent studies have shown that

Accepted Answer

A)  the relationship between trade and FDI is negative 
B)  the relationship between trade and FDI is positive 
C)  there is no relationship between trade and FDI 
D)  the relationship between trade and government regulation is positive 
E)  the relationship between trade and government regulation is negative 
A)  the relationship between trade and FDI is negative 
B)  the relationship between trade and FDI is positive 
C)  there is no relationship between trade and FDI 
D)  the relationship between trade and government regulation is positive 
E)  the relationship between trade and government regulation is negative

Question 15

What roles do GATT and WTO play in international trade?

Accepted Answer

The answer of What roles do GATT and WTO play...

Question 16

The following are strategic reasons for multinationals to invest overseas except

Accepted Answer

A)  seek resources 
B)  seek markets 
C)  avoid import barriers 
D)  nature of product 
E)  abundance of foreign exchange 
A)  seek resources 
B)  seek markets 
C)  avoid import barriers 
D)  nature of product 
E)  abundance of foreign exchange

Question 17

Distinguish between the theory of absolute advantage and the theory of comparative advantage in international trade.

Accepted Answer

The answer of Distinguish between the theory of absolute advantage...

Question 18

In John Dunning's OLI paradigm

Accepted Answer

A)  O refers to the advantages of outward foreign direct investment enjoyed by multinationals 
B)  L refers to the licensing advantages available to multinationals because of the special know how 
C)  I refers to the investment advantages available to multinationals that are unavailable to domestic firms 
D)  O refers to ownership advantages in the area of technical know-how including managerial and process skill 
E)  I refers to internalization where the multinational is better off outsourcing the foreign portion of its work to outside firms 
A)  O refers to the advantages of outward foreign direct investment enjoyed by multinationals 
B)  L refers to the licensing advantages available to multinationals because of the special know how 
C)  I refers to the investment advantages available to multinationals that are unavailable to domestic firms 
D)  O refers to ownership advantages in the area of technical know-how including managerial and process skill 
E)  I refers to internalization where the multinational is better off outsourcing the foreign portion of its work to outside firms

Question 19

Dunning's OLI paradigm to explain FDI refers to Ownership, Location and Internationalization.

Accepted Answer

A) True 
 B)False

Question 20

Under the product life-cycle theory, some goods are imported back to the country that first manufactured them as a result of cheaper manufacturing costs during the

Accepted Answer

A)  introductory stage 
B)  growth stage 
C)  mature stage 
D)  declining stage 
E)  between the introductory and growth stage 
A)  introductory stage 
B)  growth stage 
C)  mature stage 
D)  declining stage 
E)  between the introductory and growth stage

David Ricardo's theory of specialization

The Heckscher-Ohlin theorem states that a country with abundant labor resources

Mercantilism refers to the philosophy that the cheaper the imports, the greater the savings to a country.

The WTO reaches an agreement on new rules by consensus only.

What are some of the major motives for foreign direct investment by multinationals?

It is necessary for a multinational to own 100 percent of a foreign firm for its investment to be termed FDI.

When a multinational purchases 20 percent shares of a company overseas

Discuss the Heckscher-Ohlin model's to explain for differences in international trade patterns.

The product life cycle theory is better at explaining trade patterns ex-post rather than ex-ante.

During the mature stage of the product life cycle theory, companies will begin to export their goods.

Wassily Leontief showed that the the Heckshcer-Ohlin theorem

If FDI is accomplished by acquisition of a firm overseas, employment may not increase and may even decrease in the short run in the foreign country.

In John Dunning's OLI paradigm

Recent studies have shown that

What roles do GATT and WTO play in international trade?

The following are strategic reasons for multinationals to invest overseas except

Distinguish between the theory of absolute advantage and the theory of comparative advantage in international trade.

In John Dunning's OLI paradigm

Dunning's OLI paradigm to explain FDI refers to Ownership, Location and Internationalization.

Under the product life-cycle theory, some goods are imported back to the country that first manufactured them as a result of cheaper manufacturing costs during the

Introduction and Overview

International Business Environment-Culture

Economic and Other Related Environmental Variables

The Political and Legal Environment

Entry Strategies

Functional Integration

Production and Operations Management and Supply Chain Management

Outsourcing

International Finance

International Marketing

Human Resource Management and Organizational Structures

International Financial Management

International Accounting

Filters

Exam 5: International Trade and Foreign Direct Investments

David Ricardo's theory of specialization

The Heckscher-Ohlin theorem states that a country with abundant labor resources

Mercantilism refers to the philosophy that the cheaper the imports, the greater the savings to a country.

The WTO reaches an agreement on new rules by consensus only.

What are some of the major motives for foreign direct investment by multinationals?

It is necessary for a multinational to own 100 percent of a foreign firm for its investment to be termed FDI.

When a multinational purchases 20 percent shares of a company overseas

Discuss the Heckscher-Ohlin model's to explain for differences in international trade patterns.

The product life cycle theory is better at explaining trade patterns ex-post rather than ex-ante.

During the mature stage of the product life cycle theory, companies will begin to export their goods.

Wassily Leontief showed that the the Heckshcer-Ohlin theorem

If FDI is accomplished by acquisition of a firm overseas, employment may not increase and may even decrease in the short run in the foreign country.

In John Dunning's OLI paradigm

Recent studies have shown that

What roles do GATT and WTO play in international trade?

The following are strategic reasons for multinationals to invest overseas except

Distinguish between the theory of absolute advantage and the theory of comparative advantage in international trade.

In John Dunning's OLI paradigm

Dunning's OLI paradigm to explain FDI refers to Ownership, Location and Internationalization.

Under the product life-cycle theory, some goods are imported back to the country that first manufactured them as a result of cheaper manufacturing costs during the

Introduction and Overview

International Business Environment-Culture

Economic and Other Related Environmental Variables

The Political and Legal Environment

Entry Strategies

Functional Integration

Production and Operations Management and Supply Chain Management

Outsourcing

International Finance

International Marketing

Human Resource Management and Organizational Structures

International Financial Management

International Accounting

Filters