GSC Week 1

The country that represents the largest share of international trade is China

• True

• False

The Bretton Woods Conference triggered the creation of the World Trade Organization in 1944

• True

• False

The euro has replaced the currencies of all of the countries of the European Union.

• True

• False

A competitor offering a new product in a mature market can entice a company to start importing its own low-cost alternative

• True

• False

A country enjoys an absolute advantage in the production of a particular good when it can produce it at a lower price than another country.

• True

• False

Most trade today is more likely to be explained by the Theory of Comparative Advantage than by the Theory of Absolute Advantage.

• True

• False

David Ricardo’s Theory of Comparative Advantage explains why countries that enjoy an absolute advantage in making certain goods can still prefer to purchase these products from other countries

• True

• False