International Business Chapter 2

More than one-half of the exports from developing countries go to _____ countries, and this proportion has been ______ over the past 35 years.

developed; decreasing

The theory of overlapping demand:

suggests that international trade in manufactured goods will be more common between countries with similar levels of income

According to the theory of comparative advantage:

specialization and free trade will benefit all trading partners who specialize in goods where they have comparative advantage

In examining the volume of international trade:

the proportion of manufacturing value added generated by South and East Asia has quadrupled since 1980.

Regarding the volume of international trade, exports of goods and services _______ in 2010.

were nearly $19.0 trillion

Mercantilists believed that:

a nation should have an export surplus in order to accumulate precious metals

Economies of scale and the experienced curve:

explain why many companies will engage in international trade

When considering where to export, advantages to managers of focusing on a nation that is already a sizable purchaser of goods coming from the home country include:

export and import regulations are not hopeless (insurmountable)

Regarding foreign investment:

- It's the cross-border movement of finance caused by borrowing and the sale of assets. - the flows are recorded in the financial account of BOP - made up of foreign assets and foreign liabilities

More than half of the exports from developing nations go to developed nations, and:

2 of these answers: - this proportions has been declining over the past 35 years. - approximately 70% of exports from developed economies also go to other industrialized nations. - the proportions of world trade accounted for by members of regional trade agreements has grown to nearly 50%

The proportion of world commercial services exports accounted for _____ has evidenced an overall decline since 1980

2 of these: - the European union - africa - the U.S.

The proportion of world commercial services exports accounted for by _______ has evidenced an overall decline since 1980.

Asia, the middle east, and Latin America. (2 of these options is correct)

Which of the following elements are included in Porter's Diamond Model of national advantage?

all possible answers: firm strategy, structure and rivalry; related supporting industries; demand conditions; and factor conditions

The international product life cycle:

is concerned with the role of innovation in trade patterns

Regarding the annual outflows of foreign direct investment:

much of the recent increase has been associated with mergers, acquisitions, and other international investments made by companies in industries facing increased competition and global consolidation.