International Business and Trade Quiz

Which theory suggests that a country should maximize exports and minimize imports to accumulate wealth?

• Absolute Advantage

• Comparative Advantage

• Mercantilism

• Factor Proportions

According to Adam Smith, what determines a nation's wealth?

• Amount of gold and silver

• High taxation

• Living standards of the people

• Number of exports

What theory focuses on the relative efficiency of producing goods compared to other goods within a country?

• Absolute Advantage

• Comparative Advantage

• Product Life Cycle

• Mercantilism

Which two economists developed the Heckscher-Ohlin Theory?

• Smith and Ricardo

• Heckscher and Ohlin

• Porter and Krugman

• Linder and Leontief

The Leontief Paradox found that:

• The U.S. exported capital-intensive goods.

• The U.S. imported labor-intensive goods.

• The U.S. imported more capital-intensive goods than expected.

• Labor productivity had no impact on trade.

Which of the following is a firm-based trade theory?

• Comparative Advantage

• Mercantilism

• Product Life Cycle Theory

• Heckscher-Ohlin Theory

What is the first stage in the Product Life Cycle Theory?

• Growth stage

• New product stage

• Maturity stage

• Standardized product stage

Which theory focuses on why countries with similar income levels trade similar goods?

• Mercantilism

• Country Similarity Theory

• Global Strategic Rivalry Theory

• Comparative Advantage

According to Porter, a nation's competitiveness depends on:

• Volume of exports

• Low wages

• Industry capacity to innovate and upgrade

• Size of the economy

Which of the following contributes to a firm's competitive advantage under the Global Strategic Rivalry Theory?

• High tariffs

• Large population

• Research and development

• Import substitution