IB quiz #4
________ has no barriers to trade between member countries, includes a common external trade policy, and allows factors of production to move freely between members.
A common market
According to Adam Smith, a country should specialize in the production of a good when it has....
Absolute Advantage
________ eliminates trade barriers between member nations, adopts a common external policy, and permits factors of production to move freely between member countries but it also requires a common currency, harmonization of members' tax rates, and a common monetary and fiscal policy
An economic union
Unlike other trade policies, local content regulations tend to benefit consumers and not producers...
False
The Single European Act committed EU countries to adopting a common currency by January 1, 1999.... T of F
False, feb of 1992
Which of the following refers to a situation where a government does not attempt to influence through quotas or duties what its citizens can buy from another country?
Free Trade
Which of the following theories stress the role of luck, entrepreneurship, and innovation in the production and export of a good or service by the firms in a country?
New Trade Theory
The establishment of the euro required participating countries to
give up national control over monetary policy
Which of the following is seen as a benefit of the euro?
lower foreign exchange and hedging costs
The majority of cross-border investment in the developed world is in the form of..
mergers and acquisitions
Who benefits from an import tariff?
the Government
Foreign producers typically agree to voluntary export restrictions because..
they fear that harmful tariffs will follow if they dont
A key benefit resulting from the adoption of the euro is the ability to compare prices across member markets...
true
By placing tariffs on imported goods, governments can increase the cost of exporting relative to foreign direct investment and licensing... t of f
true
Countries adopting a pragmatic stance pursue policies designed to maximize the national benefits and minimize the national costs.... t or f
true
Local content regulations provide protection for a domestic producer of parts by limiting foreign competition....
true
Research supports the view that multinational firms often transfer significant technology when they invest in a foreign country...t of f
true
Which of the following best describes an industry composed of a limited number of large firms?
an oligopoly
Which of the following was required for new applicants to qualify for EU membership?....
deregulation of markets
FDI occurs when a firm...
directly invests in a product of a foreign country
Offshore production refers to FDI undertaken to serve the host market.... t or false
false, the home market not host
Tariffs do not benefit...
Consumers
The theory of comparative advantage provides strong rationale for supporting the idea of....
Free Trade
A benefit to companies of economic integration is the opportunity to centralize their production and reduce costs.....
True
Charlyce lives in a country where there are no barriers to the trade of goods and services. This is called a free trade area...
True
Coordination and policy harmonization problems are largely a function of the number of countries that seek agreement... t of F
True
Governments do not always act in the national interest when they intervene in the economy; politically important interest groups often influence them... t or f
True
The WTO supports the promotion of international trade in services....
True
