Exam 6: International Trade and Factor-Mobility Theory

Comparative advantage theory holds that gains from trade are the result of capital movements from countries with low interest rates to countries with higher interest rates.

Companies and individuals transfer capital internationally primarily because of expectations of earning higher returns.

Brain drain is a term that describes ________.

Which of the following statements is most likely FALSE?

Which of the following is the LEAST likely result of outward migration?

The trade theory that says a country should export more than it imports is known as ________.

The factor proportions theory holds that countries should concentrate production on those products that use their most abundant production factors.

What is the theory of country size? How is country size determined? How does country size affect national trade patterns?

Contrary to the product life cycle theory, there has been an increased tendency for companies to ________.

An objective of neomercantilism is to build up gold reserves.

Which of the hypothetical new products, if successful, would most likely diffuse its production and sales according to the product life cycle theory?

Neomercantilism describes the approach of countries that try to run a favorable balance of trade to ________.

The trade theory that says countries should concentrate production on those products using their most abundant production factors is the ________.

Under mercantilism, governments sought to influence trade by ________.

All the following are reasons for the lower international mobility of people than capital EXCEPT ________.

Eight of the top 10 exporting and importing countries are countries with ________.

The combination of free trade and free movement of production factors offers maximum production efficiency.

Countries enact trade policies based on trade theories, which, in turn, affect companies' optimum production locations.

Most world trade takes place ________.

Most world trade takes place between raw material exporters and manufacturing exporters.