3. International Trade and Corporations

What is a potential downside of outsourcing?

• Job growth

• Intellectual property loss

• Better dialogue

• Timing

According to the theory of comparative advantage, what leads to efficient trade?

• Local trade

• Inefficient trade

• Efficient specialization

• No trade

What is the main aim of NAFTA?

• Raise tariffs

• Promote free trade

• Merge currencies

• Limit trade

What benefits do multinational corporations have?

• More barriers

• Single-country operations

• Flexible production

• Fixed rules

What is the main role of the World Trade Organization (WTO)?

• Give loans

• Manage trade

• Exchange currency

• Set tariffs

Which company is an example of a multinational corporation?

• Local store

• Coca-Cola

• City bus

• Bakery

What is involved in "countertrade"?

• Overseas investment

• Bartering

• Franchising

• Tariffs

What is the purpose of maquiladoras in Mexico?

• Job creation

• Duty-free assembly

• Sell goods

• Trade regulation

What is the goal of economic communities like the EU?

• Increase tariffs

• Standardize tariffs

• Limit trade

• Remove borders

What does "balance of trade" measure?

• Export-import difference

• Currency rates

• Transactions

• Agreements