Exam 5: Trading Internationally

According to absolute advantage theory, by specializing and trading, each nation produces more and consumes more.

The relative advantage in one economic activity that one nation enjoys in comparison with other nations is known as:

The theory of comparative advantage states that even if a country does not have absolute advantage in production, the country can still profitably specialize if the country is relatively more efficient.

American economist Raymond Vernon divided the world into:

Discuss the political arguments against free trade.

Factor endowments; domestic demand; firm strategy, structure, and rivalry; and related and supporting industries are aspects of strategic trade theory.

The birth of modern economics and the forerunner of the free trade movement are strengths and influences of:

Widely practiced during the 1600s and 1700s, ____ viewed international trade as a zero-sum game.

The theory of absolute advantage espouses that the economic advantage one nation enjoys is superior to another nation.

The national competitive advantage of industries depends on:

Factor endowment theory is a proposition that nations will develop comparative advantage based on their locally abundant factors.

Which of the following is the first theory to incorporate dynamic changes in patterns of trade?

Managers need not be politically active to appreciate the gains from trade.

____ are restrictions on the quantity of goods brought into a country.

Based on the mercantilism theory, the wealth of all trading nations and the world increases.

Political arguments against free trade state it does not advance a nation s political, social, and environmental agendas, regardless of possible economic gains.

National competitive advantage of industries is the most recent, most complex, and most realistic among various theories.

NTBs include:

Discuss the national competitive advantage of industries.

Mercantilism is the direct intellectual ancestor of modern-day protectionism.