Exam 5: Trading Internationally

Which of the following describes the maturing stage in the product life cycle theory? 

Government intervention in international trade was proposed by the factor endowment theory.

The theory of national competitive advantage of industries does not take domestic demand conditions into account.

_____ are government payments to domestic firms.

Economist Adam Smith proposed the theory of comparative advantage.

Which of the following is true of the strategic trade theory? 

The _____ theory advocates government intervention in highly capital-intensive,high entry-barrier industries in which domestic firms may have little chance without government assistance.

The _____ theory is based on the assumption that the wealth of the world is fixed.

Which theory suggests that nations will develop comparative advantages based on their locally abundant factors? 

Import quotas are a type of _____.

The infant industry argument demands lesser government intervention in international trade.

The _____ principle advocated that governments should actively protect domestic industries from imports and vigorously promote exports.

Environmental and social responsibility can be used as political arguments to initiate trade intervention against certain countries.

Antidumping duties are levied on a country's exports.

The theory of mercantilism viewed international trade as a zero-sum game.

Which of the following can be considered as an economic argument against free trade? 

In the context of tariff barriers,deadweight costs = _____.

By trying to be self-sufficient and producing a wide range of goods,_____ policies reduce the wealth of a nation in the long run.

What are the few factors that determine the success and failure of firms' exports around the globe?

In the context of tariff barriers,net losses that occur in an economy as a result of tariffs are known as deadweight costs.