Chapter 2

When assembly-line jobs in uncompetitive manufacturing sectors such as furniture migrate to countries like Mexico, Bangladesh, and Vietnam, or when service sector jobs such as call centers are sent abroad to countries like India or the Philippines, these are examples of what?

• international business

• FDI

• Outsourcing

• Trade

In a country, what brings funds and business culture from abroad, creates new well-paying jobs, introduces innovative technologies, and enhances the skills of domestic workers?

• outsourcing

• trade

• merantilism

• FDI

Citizens from both Brazil and the United States would enjoy the benefits of lower-cost coffee and corn because of trade. If these two countries did not trade, the United States would need to produce its own coffee and Brazil would need to grow its own corn, which in both cases would be inefficient and at a high cost to citizens. This is an example of what?

• absolute advantage

• comparative advantage

• factor endowment

• mercantilism

What is it called when one country has an absolute advantage in the production of two or more goods or services and produces one of them relatively more efficiently than the other?

• absolute advantage

• comparative advantage

• mercantilism

• factor endowment

What are agreements called between countries that aim at achieving certain trade outcomes, though sometimes temporary?

• tariffs

• managed trade

• counter trade

• domestic content provisions

For over 50 years, the U.S. has put pressure on the government of Cuba to move the country toward a free market and democracy with greater economic and political freedom for its citizens. The "pressure" the U.S. has put on Cuba is an example of what?

• domestic content provisions

• countertrade

• embargo

• infant industry agreement

What type of agreement occurs when a large number of developed countries permit duty-free imports of a selected list of products that originate from specific countries?

• VER

• countertrade

• MFN

• generalized system of preferences

What theory of international trade is the oldest form of trade theory and was practiced during the 1500–1750 period as Europe emerged from the feudal systems of the Middle Ages and moved toward nationalism?

• H-O

• Mercantilism

• Factor Endowment

• Comparative Advantage