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.
QUESTION Although mercantilism is an old and largely discredited doctrine, its echoes remain in modern political debate and in the trade policies of many countries. Indicate whether the statement is true or false. ANSWER TRUE Although mercantilism is an old and largely discredited doctrine, its echoes remain in modern political debate and in the […]
QUESTION Pressures for greater protectionism increased around the world during the 1980s and early 1990s due to the strain caused by the persistent trade deficit in the world’s largest economy, Japan. Indicate whether the statement is true or false. ANSWER FALSE During the 1980s and early 1990s, the world trading system erected by the […]
