QUESTION Containerization has revolutionized the transportation business, significantly lowering the costs of shipping goods over long distances. Indicate whether the statement is true or false. ANSWER TRUE In economic terms, the most important major innovations in transportation technology are probably the development of commercial jet aircraft and superfreighters and the introduction of containerization, which […]
QUESTION The Uruguay Round extended GATT to cover services as well as manufactured goods. Indicate whether the statement is true or false. ANSWER TRUE The Uruguay Round reduced trade barriers; extended GATT to cover services as well as manufactured goods; provided enhanced protection for patents, trademarks, and copyrights; and established the World Trade Organization […]
QUESTION The stock of foreign direct investment refers to the total cumulative value of foreign investments in a country. Indicate whether the statement is true or false. ANSWER TRUE The stock of foreign direct investment refers to the total cumulative value of foreign investments in a country
QUESTION Many of the former Communist nations of Europe and Asia seem to share a commitment to democratic policies and free market economies Indicate whether the statement is true or false. ANSWER TRUE Many of the former Communist nations of Europe and Asia seem to share a commitment to democratic policies and free market […]
QUESTION Which of the following allows two or more firms to share the fixed costs (and associated risks) of developing new products or processes? A. Franchising agreement B. Global web C. Free trade agreement D. Strategic alliance E. Dispersion linkage ANSWER D
QUESTION Although most international trade and investment are still conducted by large firms, many medium-size and small businesses are becoming increasingly involved in international trade and investment. Indicate whether the statement is true or false. ANSWER TRUE Although most international trade and investment are still conducted by large firms, many medium-size and small businesses […]
QUESTION The cost of doing business is most likely to be the lowest in: A. closed totalitarian states. B. primitive or undeveloped economies. C. open democratic societies. D. countries where local laws and regulations set strict standards with regard to product safety, safety in the workplace, and environmental pollution. E. countries that lack well-established laws […]
QUESTION Both China and India have achieved high growth rates despite relatively weak property rights regimes and high levels of corruption, because of: A. the shift toward a communist ideology. B. their high living standards. C. their large population. D. their high consumer purchasing power. E. the shift toward a market-based economic system. ANSWER […]
QUESTION According to Adam Smith, market mechanism, rather than government policy, should determine a country’s imports and exports. Indicate whether the statement is true or false. ANSWER TRUE Adam Smith argued that the invisible hand of the market mechanism, rather than government policy, should determine what a country imports and what it exports.
QUESTION The theories of Smith, Ricardo, and Heckscher-Ohlin failed to identify the specific benefits of international trade. Indicate whether the statement is true or false. ANSWER FALSE The great strength of the theories of Smith, Ricardo, and Heckscher-Ohlin is that they identify with precision the specific benefits of international trade.
