Which of the following refers to the purchase, sale, or exchange of goods and services across national borders?

• Domestic trade

• Foreign direct investment

• International trade

• Mercantilism

Most of the world merchandise trade is comprised of trade in ________.

         

•   natural resources

• services

• manufactured goods

• knowledge-based goods

Countries did all of the following to implement mercantilism EXCEPT ________.

• enhanced trade deficits

• government intervention

• colonization

• maintained trade surpluses

Both absolute and comparative advantage theories assume that ________ is the only resource used in the production process.

• land

• labour

• capital

• information

When a country is not able to produce a good more efficiently than other nations, but produces the good more efficiently than it does any other good, it is said to have a(n)

• absolute advantage

• resource problem

• first-mover advantage

• comparative advantage

The _______ theory states that countries produce and export goods that require resources that are abundant, and import goods that require resources in short supply.

• new trade

• absolute advantage

• international product life cycle

• factor proportions

The Leontief paradox describes evidence ________.

• that U.S. exports require more labor-intensive production than its imports

• in support of factor proportions theory

• that U.S. exports require more capital-intensive production than its imports

• that the assumptions of new trade theory are invalid

During which stage of the product life cycle are companies looking for low-cost production bases in developing nations to supply a growing worldwide market?

• Idiosyncratic stage

• New product stage

• Maturing product stage

• Standardized product stage

Which of the following is NOT an argument offered by the new trade theory?

• Gains can arise from diversification and staying small.

• Gains can arise from specialization and increasing economies of scale.

• Companies first to enter a market can create barriers to entry.

• Government has a role to play in assisting home companies.

National competitive advantage theory states that a nation’s competitiveness in an industry depends on ________.

• the level of government subsidy available

• the capacity of the industry to innovate and upgrade

• obtaining a first-mover advantage

• practicing neo-mercantilism