Unit 2 Review - Global Eco

Check all that apply: Why do companies expand internationally?

• To increase profits

• To access new markets

• To take advantage of factors of production

• To differentiate their product

True or False: Another name for a multinational corporation is a transnational corporation.

• True

• False

Check all that apply: The following are ways in which a company expands internationally.

• Joint Venture

• Licensing Agreements

• Franchising

• Exporting & Importing

• Foreign Direct Investment

Which of the following is not a reason a country trades?

• They cannot produce a product domestically

• To have a wider variety of goods available to consumers

• To protect a domestic industry

• Other countries are better equipt to produce a good

True or False: Absolute advantage refers to the uncontested superiority of a country to produce a particular good better.

• True

• False

True or False: A country with a comparative advantage in coffee mugs and an absolute advantage in guitars should produce and export coffee mugs.

• True

• False

True or False: Opportunity cost is the forgone benefit that would have been derived by an option not chosen.

• True

• False

True or False: A multinational company is a multinational conglomerate.

• True

• False

Which measurement is most helpful to economists in analyzing the country's growth?

• Real GDP

• Nominal GDP

• GDP Per Capita

• The number of Mr. Goldin's students who earn an A in his class

True or False: A zipper produced to be included and sold in a backpack is counted in GDP.

• False

• True