intl exam 2

Which trade theory has these implications: (1) nations may benefit from trade even when they do not differ in resource endowments or technology; and (2) specialization allows for scale economies and lower production costs?

new trade

Because of economies of scale, some countries specialize in manufacturing a particular product (such as cars) for which the global market can only support a limited number of firms. This is a reflection of _____. Multiple choice question.

new trade theory

Sachs and Warner found a strong correlation between a(n) ______ response to trade and economic growth. Multiple choice question. open

open

The main objective of antidumping policies is to Multiple choice question.

protect domestic producers from unfair foreign competition.

One consequence of free trade is higher domestic consumption and a more efficient use of resources. These would be considered _____ economic gains.

static

A basic message of Ricardo's theory of comparative advantage is that: (Check the two that apply.)

-potential world production is greater with unrestricted free trade than it is with restricted trade. -even if countries lack an absolute advantage in the production of any good, consumers can still consume more if there are no restrictions on trade.

What is the theory that states that countries will export goods that make intensive use of the factors that are abundant in the economy?

Heckscher-Ohlin

What aspect of free trade does Samuelson see as a potential negative influence on international trade? Multiple choice question.

Offshoring of service jobs such as call centers

Company ABC in Scotland exports a pound of cheese to the US for $100. The US places a 9% tax on the cheese as a proportion of its value. What type of tariff is this?

ad valorem

According to Adam Smith's theory of absolute advantage, who benefits from engaging in trade? Multiple choice question.

both countries

Earnings from a foreign subsidiary to the parent company are recorded as ______ on the balance-of-payments accounts. Multiple choice question.

capital outflow

Porter's study identified components of the German textile and apparel sector: cotton, wool, synthetic fibers, sewing machine needles, textile machinery. These were all successful industries in a single country that grouped into related industries. This grouping is an example of a(n)

cluster

Porter states that a company can gain ______ advantage if their home customers are demanding and knowledgeable. Multiple choice question.

competitve

According to new trade theory, the first mover's ability to benefit from increasing returns ______ for other firms. Multiple choice question.

creates a barrier to entry

What did Porter call the concept where firms are typically most sensitive to the needs of their closest customers? Multiple choice question.

demand conditions

According to the Samuelson critique, middle class wages in the United States will be _____ as the result of the offshoring of service jobs and rapid advances in foreign labor productivity.

diminished

The _____ Round started in 2001 and continues today to deal with the issues of agriculture protectionism, protection of intellectual property, and other priorities of the WTO. Multiple choice question.

doha

One benefit of free trade is that it stimulates economic growth and wealth creation. In other words, it provides _____ economic gains. Multiple choice question.

dynamic

the ______ argues that combining location specific assets or resource endowments and the firm's own unique assets often requires FDI.

ecclectric paradigm

The Heckscher-Ohlin theory of international trade focuses on ______ when explaining what a country chooses to export.

factors of production

______ theory of FDI suggests that firms imitate and react to each other's behavior.

knickerbonker

What are four main instruments of trade policy? Multiple select question.

-Local content requirements -import quotas -tariffs -antidumping duties

Which two world events imply that free trade is not a global consensus? Multiple select question.

-election of donald -The withdrawal of Britain from EU

What are two reasons diminishing returns to specialization occur?

-Different goods use resources in different proportions. -Not all resources are of the same quality.

What are two characteristics of the eclectic paradigm? Choose all that apply.

-It provides a single holistic explanation of foreign direct investment -It combines the best aspects of other theories of foreign direct investment into a single explanation