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 […]
QUESTION A critical competitive feature of an oligopoly is independence of the major players. Indicate whether the statement is true or false. ANSWER FALSE An oligopoly is an industry composed of a limited number of large firms. A critical competitive feature of such industries is interdependence of the major players: What one firm does […]
QUESTION Which of the following is most likely to necessitate the delegation of marketing functions to national subsidiaries? A. Differences in distribution channels B. Pressures for decreasing consumer surplus C. Lack of product customization D. Pressures for increasing economies of scale E. Pressures for increasing consumers’ reservation price ANSWER A
