Exam 6: International Trade and Investment

How can an understanding of international trade theories and foreign investment theories benefit MNEs?

What is the goal of mercantilism? How is mercantilism implemented? What are the disadvantages of mercantilism?

MAX Electronics produces tiny wireless speakers that can be used with computers and MP3 players. The firm has built new factories to expand capacity and meet increasing domestic and foreign demand. Over the last six months, foreign and domestic competitors have emerged with a similar product in an attempt to benefit from high consumer demand. MAX Electronics is most likely in the ________ product stage of the product life cycle.

The theory of absolute advantage considers relative productivity differences between countries.

Heineken has used FDI extensively as part of its internationalization strategy because of the cost of transporting its products.

What is opportunity cost? Why is opportunity cost an important consideration when determining what a country should export and import?

Which of the following is not one of the conditions specified in eclectic theory for the occurrence of foreign direct investment?

In 2009, total international merchandise trade accounted for about ________ percent of the world's GDP.

Which international trade theory originated in the marketing field?

World trade initially grew after World War II, but in the last decade has dropped off and been replaced with FDI.

According to the international product life cycle theory, the innovating firm's country is primarily an exporter of the product in all three stages.

Saudi Arabia has large crude oil reserves, and India has a large pool of skilled workers. These are both examples of ________.

Which theory suggests that trade flows can be determined by firms making the necessary research and development expenditures?

Adam Smith developed the theory of comparative advantage.

Outward foreign direct investment has been larger than inward foreign direct investment during the last decade for the United States.

In 2009, China accounted for nearly ________ of the world's merchandise exports.

________ are the costs of negotiating, monitoring, and enforcing a contract.

Taylor Helmets has been able to lower the average cost of producing a bicycle helmet as it increases the number of helmets it manufactures each day. Taylor Helmets is most likely benefitting from ________.

Which factors of production did Leontief focus on?

Which type of investment involves the acquisition of foreign assets for the purpose of controlling them?