Test 2-IB

Hecksher-Ohlin

A capital-intensive country exports products that are capital intensive. Which theory is this an example of?

the benefits outweigh the costs

According to pragmatic nationalist view, FDI should be allowed so long as

cultural relativism

According to the ____ point of view, a firm should adopt the ethics of the culture in which it is operating

bureaucratic rules designed to make it difficult for imports to enter a country

Administrative trade policies are

a competitive advantage

Business firms that lobby their governments to engage in protectionism may miss the opportunity to build _____ by constructing a globally dispersed production system

Smoot-Hawley Act

Economic problems during the Great Depression were compounded in 1930 when the US congress passed the ____, aimed at avoiding rising unemployment by protecting domestic industries and diverting consumer demand away from foreign products

permitted under the amended Foreign Corrupt Practices Act

Facilitating payments are

a firm should adopt the ethics of the culture in which it is operating

Miranda is a cultural relativist, which means she likely believes

can influence each of the four components of the diamond either positively or negatively

Porter contends that government

export those goods that make intensive use of factors that are locally abundant

The Heckscher-Ohlin theory predicts that countries will

administrative trade policies

The Netherlands exports tulip bulbs to almost every country in the world except Japan. This was b/c in Japan, customs inspectors insisted on checking every tulip bulb by cutting it vertically down the middle. This is an example of which of the following trade barriers?

retaliation

The US government has used the threat of punitive trade sanctions to try to get the chinese government to enforce intellectual property laws. This is an example of government intervention based on

tragedy of the commons

The ___ occurs when a resource held in common by all, but owned by no one, is overused by individuals, resulting in its degradation

Foreign Corrupt Practices Act

The ___ outlawed the paying of bribes to foreign government officials to gain businesses

new trade theory

The commercial aircraft industry can support only a limited number of firms, largely b/c the existence of established firms would make it difficult to be competitive. This is a basic tenet of

theory of comparative advantage

The free market view argues that international production should be distributed among countries according the

social responsibility

The idea that businesspeople should consider the social consequences of economic actions when making business decisions and that there should be a presumption in favor of decisions that have both good economic and social consequences is known as

maintain a trade surplus

The main tenet of mercantilism is that it is in a country's best interests to

both the benefits and costs

The pragmatic nationalist view highlights _____ of FDI

raw material availability

What is the primary reason Africa has attracted FDI in recent years?

mergers and acquisitions are quicker to execute than greenfield investments

When contemplating FDI, why do firms apparently prefer to acquire existing assets rather than undertake greenfield investments?

it may invite retaliation and trigger a trade war

Which of the following is a drawback of government intervention?

mercantilitsts view trade as a zero-sum game

Which of the following is a flaw associated with mercantilism?

by implementing import quotas

Which of the following is a way in which governments increase the attractiveness of FDI and licensing relative to exporting?

A chinese sugar maker sets up a sugar crushing facility in Cuba

Which of the following is an example of a greenfield investment?

tariffs

Which of the following is one of the main instruments of trade policy?

it benefits domestic producers by limiting import competition

Which of the following statements concerning a voluntary export restraint is true?

factor endowments

Which of the following terms refers to a nation's position in factors of production, such as skilled labor or the infrastructure necessary to compete in a given industry?

new trade theory

Which of the following theories suggests that first-mover advantage is significant in the export of a good?

the government

Who benefits from an import tariff?

Mercantilism

____ supports the idea that countries should export more than they import

Adam Smith

_____ argued that countries should specialize in the production of goods for which they have an absolute advantage

location-specific advantages

_____ arise(s) from using resource endowments or assets that are tied to a particular foreign location and that a firm finds valuable to combine with its own unique assets

environmental regulations are similar across developed and developing nations

Identify the INCORRECT statement about environmental regulations

an import quota

In the US, the only firms allowed to import cheese are certain trading companies, each of which is allocated the right to import a max number of pounds of cheese each year. This is an example of

the moral obligation of multinational corporations

In the international business setting, one of the most common ethical issues involves

when the firm needs tight control over a foreign entity

In which of the following situations does the internalization theory recommend FDI as opposed to licensing?

if the FDI is a substitute for imports of goods or services

In which of the following situations would FDI improve the current account of the host country's balance of payments?

the attainment of an equitable distribution of goods and services

Justice theories of business ethics focus on

Convention on International Business transactions

the ______ obliges member states to make the bribery of foreign public officials a criminal offense and excludes facilitating payments made to expedite routine government action from the convention