Question 1

Strategic trade theory advocates mercantilist policy for all industries.

Accepted Answer

A) True 
 B)False

Question 2

Import quotas are a type of _____.

Accepted Answer

A)  tariff barrier 
B)  nontariff barrier 
C)  voluntary export restraint 
D)  antidumping duty 
A)  tariff barrier 
B)  nontariff barrier 
C)  voluntary export restraint 
D)  antidumping duty

Question 3

One of the arguments against free trade is the necessity to safeguard domestic industries.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following can be considered as an economic argument against free trade?

Accepted Answer

A)  National security 
B)  Foreign policy 
C)  Consumer protection 
D)  Infant industry 
A)  National security 
B)  Foreign policy 
C)  Consumer protection 
D)  Infant industry

Question 5

The _____ theory is based on the assumption that the wealth of the world is fixed.

Accepted Answer

A)  product life cycle 
B)  mercantilism 
C)  strategic trade 
D)  national competitive advantage of industries 
A)  product life cycle 
B)  mercantilism 
C)  strategic trade 
D)  national competitive advantage of industries

Question 6

Briefly explain the strengths and weaknesses of the absolute advantage and comparative advantage trade theories.

Accepted Answer

The economic advantage one nation enjoys

Question 7

Which theory suggests that nations will develop comparative advantages based on their locally abundant factors?

Accepted Answer

A)  Heckscher-Ohlin theory 
B)  Absolute advantage theory 
C)  Comparative advantage theory 
D)  Strategic trade theory 
A)  Heckscher-Ohlin theory 
B)  Absolute advantage theory 
C)  Comparative advantage theory 
D)  Strategic trade theory

Question 8

The theory of national competitive advantage of industries assumes that comparative advantage always resides in the lead innovation nation.

Accepted Answer

A) True 
 B)False

Question 9

_____ are the most direct denial of absolute or comparative advantage.

Accepted Answer

A)  Quotas 
B)  Tariffs 
C)  Local content requirements 
D)  Subsidies 
A)  Quotas 
B)  Tariffs 
C)  Local content requirements 
D)  Subsidies

Question 10

_____ are politically motivated trade sanctions against foreign countries to signal displeasure.

Accepted Answer

A)  Trade embargoes 
B)  VERs 
C)  Subsidies 
D)  Antidumping duties 
A)  Trade embargoes 
B)  VERs 
C)  Subsidies 
D)  Antidumping duties

Question 11

Which of the following is true of the strategic trade theory?

Accepted Answer

A)  It provides direct policy advice. 
B)  It advocates complete deregulation of international trade. 
C)  It explains patterns of trade based on factor endowments. 
D)  It is the first theory to account for dynamic changes in trade patterns. 
A)  It provides direct policy advice. 
B)  It advocates complete deregulation of international trade. 
C)  It explains patterns of trade based on factor endowments. 
D)  It is the first theory to account for dynamic changes in trade patterns.

Question 12

The product life cycle theory is popularly known as the "diamond" theory.

Accepted Answer

A) True 
 B)False

Question 13

Economist Adam Smith proposed the theory of comparative advantage.

Accepted Answer

A) True 
 B)False

Question 14

In the context of tariff barriers,deadweight costs = _____.

Accepted Answer

A)  total inefficiency - net gain 
B)  net loss - net gain 
C)  total inefficiency - net loss 
D)  total inefficiency - net gain - net loss 
A)  total inefficiency - net gain 
B)  net loss - net gain 
C)  total inefficiency - net loss 
D)  total inefficiency - net gain - net loss

Question 15

The _____ principle advocated that governments should actively protect domestic industries from imports and vigorously promote exports.

Accepted Answer

A)  comparative advantage 
B)  absolute advantage 
C)  protectionism 
D)  factor endowment 
A)  comparative advantage 
B)  absolute advantage 
C)  protectionism 
D)  factor endowment

Question 16

Which of the following ideas is closely linked to the theory of absolute advantage?

Accepted Answer

A)  All international trade must be closely regulated by governments. 
B)  Free market forces should determine how much to trade with minimal government intervention. 
C)  Governments should actively protect domestic industries from imports and vigorously promote exports. 
D)  Nations should specialize in economic activities in which they have comparative advantage. 
A)  All international trade must be closely regulated by governments. 
B)  Free market forces should determine how much to trade with minimal government intervention. 
C)  Governments should actively protect domestic industries from imports and vigorously promote exports. 
D)  Nations should specialize in economic activities in which they have comparative advantage.

Question 17

Political arguments against free trade focus on protectionism and infant industries.

Accepted Answer

A) True 
 B)False

Question 18

The theory of mercantilism viewed international trade as a zero-sum game.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following was the first international trade theory to account for changes in the patterns of trade over time?

Accepted Answer

A)  Comparative advantage theory 
B)  Absolute advantage theory 
C)  Product life cycle theory 
D)  Factor endowment theory 
A)  Comparative advantage theory 
B)  Absolute advantage theory 
C)  Product life cycle theory 
D)  Factor endowment theory

Question 20

In the context of NTBs,_____ are bureaucratic rules that make it harder to import foreign goods.

Accepted Answer

A)  VERs 
B)  administrative policies 
C)  local content requirements 
D)  deregulation policies 
A)  VERs 
B)  administrative policies 
C)  local content requirements 
D)  deregulation policies

Strategic trade theory advocates mercantilist policy for all industries.

Import quotas are a type of _____.

One of the arguments against free trade is the necessity to safeguard domestic industries.

Which of the following can be considered as an economic argument against free trade?

The _____ theory is based on the assumption that the wealth of the world is fixed.

Briefly explain the strengths and weaknesses of the absolute advantage and comparative advantage trade theories.

Which theory suggests that nations will develop comparative advantages based on their locally abundant factors?

The theory of national competitive advantage of industries assumes that comparative advantage always resides in the lead innovation nation.

_____ are the most direct denial of absolute or comparative advantage.

_____ are politically motivated trade sanctions against foreign countries to signal displeasure.

Which of the following is true of the strategic trade theory?

The product life cycle theory is popularly known as the "diamond" theory.

Economist Adam Smith proposed the theory of comparative advantage.

In the context of tariff barriers,deadweight costs = _____.

The _____ principle advocated that governments should actively protect domestic industries from imports and vigorously promote exports.

Which of the following ideas is closely linked to the theory of absolute advantage?

Political arguments against free trade focus on protectionism and infant industries.

The theory of mercantilism viewed international trade as a zero-sum game.

Which of the following was the first international trade theory to account for changes in the patterns of trade over time?

In the context of NTBs,_____ are bureaucratic rules that make it harder to import foreign goods.

Globalizing Business

Understanding Formal Institutions: Politics, Laws, and Economics

Emphasizing Informal Institutions: Cultures, Ethics, and Norms

Leveraging Resources and Capabilities

Investing Abroad Directly

Dealing with Foreign Exchange

Capitalizing on Global and Regional Integration

Growing and Internationalizing the Entrepreneurial Firm

Entering Foreign Markets

Managing Global Competitive Dynamics

Making Alliances and Acquisitions Work

Strategizing,Structuring,and Learning around the World

Competing on Marketing and Supply Chain Management

Managing Human Resources Globally

Financing and Governing the Corporation Globally

Managing Corporate Social Responsibility Globally

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Exam 5: Trading Internationally

Strategic trade theory advocates mercantilist policy for all industries.

Import quotas are a type of _____.

One of the arguments against free trade is the necessity to safeguard domestic industries.

Which of the following can be considered as an economic argument against free trade?

The _____ theory is based on the assumption that the wealth of the world is fixed.

Briefly explain the strengths and weaknesses of the absolute advantage and comparative advantage trade theories.

Which theory suggests that nations will develop comparative advantages based on their locally abundant factors?

The theory of national competitive advantage of industries assumes that comparative advantage always resides in the lead innovation nation.

_____ are the most direct denial of absolute or comparative advantage.

_____ are politically motivated trade sanctions against foreign countries to signal displeasure.

Which of the following is true of the strategic trade theory?

The product life cycle theory is popularly known as the "diamond" theory.

Economist Adam Smith proposed the theory of comparative advantage.

In the context of tariff barriers,deadweight costs = _____.

The _____ principle advocated that governments should actively protect domestic industries from imports and vigorously promote exports.

Which of the following ideas is closely linked to the theory of absolute advantage?

Political arguments against free trade focus on protectionism and infant industries.

The theory of mercantilism viewed international trade as a zero-sum game.

Which of the following was the first international trade theory to account for changes in the patterns of trade over time?

In the context of NTBs,_____ are bureaucratic rules that make it harder to import foreign goods.

Globalizing Business

Understanding Formal Institutions: Politics, Laws, and Economics

Emphasizing Informal Institutions: Cultures, Ethics, and Norms

Leveraging Resources and Capabilities

Investing Abroad Directly

Dealing with Foreign Exchange

Capitalizing on Global and Regional Integration

Growing and Internationalizing the Entrepreneurial Firm

Entering Foreign Markets

Managing Global Competitive Dynamics

Making Alliances and Acquisitions Work

Strategizing,Structuring,and Learning around the World

Competing on Marketing and Supply Chain Management

Managing Human Resources Globally

Financing and Governing the Corporation Globally

Managing Corporate Social Responsibility Globally

Filters