Exam 2: International Trade Theory and Application

Which of the following is not an element of Vernon's PLC?

New trade theory postulates that trade is explained and predicted by all except

By definition, trade is ___________ to predict

Absolute Advantage theory was introduced by

Mercantilists identified national wealth with the size of a nation's reserves of precious metals.

New Trade Theory specializes in

__________ theory further developed the imitation-gap approach by suggesting that changes occur in the input requirements of a new product as it becomes established in a market and standardized in production.

Under mercantilism, the government had two goals in foreign economic policy.

Mercantilism is a doctrine that emerged in the

The product life cycle theory would predict that washing machines will probably be produced mainly in

The Leontief theories challenge Heckscher-Ohlin's suppositions.

_________________ argues that the exchange of goods between agricultural and industrial countries would result in an increase in the previously relatively low levels of land rents and a drop in the high level of industrial wages in the agricultural country.

Smith argued that all nations would benefit from unregulated, free trade

All trade theories explain trade equally well.

An example of an unfair trade practice is

_________ means literally "let make freely" or, more generally, "freedom of enterprise and freedom of commerce."

Governments use gold reserves to intervene in foreign exchange markets.

The concept of comparative advantage indicates that trade exists when

Movement of production from advanced high-income economies to low-income economies indicates a movement along

The second policy of mercantilists is to extract trade gains from foreigners through regulations and controls so as to achieve a surplus in the balance of trade through maximizing exports.