Exam 6: International Trade Theory

Wal-Mart makes bulk purchases from its vendors and hence it is able to get better deals than its competitors. This allows Wal-Mart to offer greater discounts to its customers. In this case, Wal-Mart benefits from ____.

Free

(Multiple Choice)

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Question 1

Correct Answer:

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Which of the following is a theory that can be used to justify limited government intervention to support the development of certain export-oriented industries?

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(Multiple Choice)

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Question 2

Correct Answer:

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Explain how the theories of trade differ in terms of their support to governmental intervention.

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(Essay)

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Question 3

Correct Answer:

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The theories of Smith, Ricardo, and Heckscher-Ohlin form part of the case for unrestricted free trade. The argument for unrestricted free trade is that both import controls and export incentives (such as subsidies) are self-defeating and result in wasted resources. Both the new trade theory and Porter's theory of national competitive advantage can be interpreted as justifying some limited government intervention to support the development of certain export-oriented industries.

A key assumption in the Heckscher-Ohlin theory is that technologies are the same across countries.

(True/False)

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Question 4

A country has an absolute advantage in the production of a product when it ____.

(Multiple Choice)

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Question 5

David Ricardo's theory of comparative advantage explains international trade in terms of international differences in political environments.

(True/False)

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Question 6

Which of the following terms refers to the extent to which a country is gifted with such resources as land, labor, and capital?

(Multiple Choice)

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Question 7

If foreigners suddenly reduced their investments in the United States, what would happen?

(Multiple Choice)

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Question 8

Which of the following accounts records transactions that involve the purchase or sale of assets?

(Multiple Choice)

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Question 9

Which of the following arguments supports the Paul Samuelson's critique?

(Multiple Choice)

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Question 10

Which of the following balance-of-payment accounts records one-time changes in the stock of assets?

(Multiple Choice)

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Question 11

New trade theory suggests that nations cannot benefit from trade when they do not differ in resource endowments or technology.

(True/False)

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Question 12

Explain Smith's theory of absolute advantage.

(Essay)

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Question 13

Which of the following refers to a situation where a government does not attempt to influence through quotas or duties what its citizens can buy from another country?

(Multiple Choice)

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Question 14

Porter contends that government has little or no effect on the four components that shape the environment in which firms compete.

(True/False)

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Question 15

Free trade refers to a situation where a government does not attempt to influence through quotas or duties what its citizens can buy from another country.

(True/False)

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Question 16

According to Adam Smith, A country should specialize in the production of a good when it has ____.

(Multiple Choice)

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Question 17

When a country runs a current account deficit, what happens to the money that flows to other countries?

(Multiple Choice)

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Question 18

According to Paul Samuelson's critique, a poor country will rapidly improve its productivity if a rich country enters into a free trade agreement with it.

(True/False)

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Question 19

Adam smith argued that countries should specialize in the production of goods for which they have an absolute advantage.

(True/False)

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Question 20

Showing 1 - 20 of 105

Wal-Mart makes bulk purchases from its vendors and hence it is able to get better deals than its competitors. This allows Wal-Mart to offer greater discounts to its customers. In this case, Wal-Mart benefits from ____.

Which of the following is a theory that can be used to justify limited government intervention to support the development of certain export-oriented industries?

Explain how the theories of trade differ in terms of their support to governmental intervention.

A key assumption in the Heckscher-Ohlin theory is that technologies are the same across countries.

A country has an absolute advantage in the production of a product when it ____.

David Ricardo's theory of comparative advantage explains international trade in terms of international differences in political environments.

Which of the following terms refers to the extent to which a country is gifted with such resources as land, labor, and capital?

If foreigners suddenly reduced their investments in the United States, what would happen?

Which of the following accounts records transactions that involve the purchase or sale of assets?

Which of the following arguments supports the Paul Samuelson's critique?

Which of the following balance-of-payment accounts records one-time changes in the stock of assets?

New trade theory suggests that nations cannot benefit from trade when they do not differ in resource endowments or technology.

Explain Smith's theory of absolute advantage.

Which of the following refers to a situation where a government does not attempt to influence through quotas or duties what its citizens can buy from another country?

Porter contends that government has little or no effect on the four components that shape the environment in which firms compete.

Free trade refers to a situation where a government does not attempt to influence through quotas or duties what its citizens can buy from another country.

According to Adam Smith, A country should specialize in the production of a good when it has ____.

When a country runs a current account deficit, what happens to the money that flows to other countries?

According to Paul Samuelson's critique, a poor country will rapidly improve its productivity if a rich country enters into a free trade agreement with it.

Adam smith argued that countries should specialize in the production of goods for which they have an absolute advantage.

Globalization

National Differences in Political Economy

Political Economy and Economic Development

Differences in Culture

Ethics in International Business

The Political Economy of International Trade

Foreign Direct Investment

Regional Economic Integration

The Foreign Exchange Market

The International Monetary System

The Global Capital Market

The Strategy of International Business

The Organization of International Business

Entry Strategy and Strategic Alliances

Exporting, Importing, and Countertrade

Global Production, Outsourcing, and Logistics

Global Marketing and RD

Global Human Resource Management

Accounting and Finance in the International Business

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