Global Business Chapter 5

The importance of trade for a nation can be measured by ________. Select one: a. examining the volume of its trade relative to its total output b. the number of acquired territories the nation has that serves as sources of inexpensive raw materials c. the living standards of people involved in only trade activities d. examining the amount of wealth acquired by the national government through restrictive trade policies

a. examining the volume of its trade relative to its total output

A majority of the total world merchandise trade occurs among ________. Select one: a. newly industrialized countries b. high-income economies c. middle-income and low-income economies d. emerging markets

b. high-income economies

Most of the world merchandise trade is composed of trade in ________. Select one: a. agricultural products b. manufactured goods c. services d. minerals

b. manufactured goods

The focus of factor proportions theory is on the ________. Select one: a. use of expensive production factors b. productivity of the production process c. cost-effectiveness of the production process d. use of depleting production factors

b. productivity of the production process

National competitive advantage theory states that a nation's competitiveness in an industry depends on ________. Select one: a. the availability of government subsidies for industry development b. the capacity of the industry to innovate and upgrade c. the capacity of companies to create barriers to entry d. the availability of cheap factors of production in the nation

b. the capacity of the industry to innovate and upgrade

One of the major pillars upon which the practice of mercantilism rested was ________. Select one: a. economies of scale b. trade surpluses c. pricing mechanism d. excessive imports

b. trade surpluses

Who proposed the theory of absolute advantage? Select one: a. Raymond Vernon b. David Ricardo c. Adam Smith d. Bertil Ohlin

c. Adam Smith

The theory of comparative advantage was proposed by ________. Select one: a. Bertil Ohlin b. Raymond Vernon c. David Ricardo d. Adam Smith

c. David Ricardo

The ________ theory states that a country's export eventually becomes its import. Select one: a. competitive advantage b. new trade c. international product life cycle d. factor proportions

c. international product life cycle

Which of the following was a prominent mercantilist nation? Select one: a. Japan b. U.S. c. China d. Britain

d. Britain