Deck 3: Theories of Trade and Economic Development

Question 1

_______ is the economic system that emphasized that governments should increase their wealth by the accumulation of precious metals.

A) Narcissism
B) Mercantilism
C) Classical Liberalism
D) Marxism

Answer 1

B

Question 2

________ considers the relative production efficiency of a nation when determining where to concentrate international trade.

A) Comparative Advantage
B) Absolute Advantage
C) Neo-mercantilism
D) Crony capitalism

Answer 2

A

Question 3

Determining export value according to how much of a domestic commodity each nation must exchange in order to obtain an equivalent amount of an imported commodity is known as _______.

A) Capitalism
B) Comparative Advantage
C) Balance of Trade
D) Terms of Trade

Answer 3

D

Question 4

Factor Endowment Theory was originally postulated by ______.

A) Heckle and Jeckle
B) Hirschman & Herfindahl
C) Heckscher & Olin
D) Ajami & Goddard

Question 5

The Leontief Paradox can best be described as __________.

A) U.S. imports were concentrated in furniture and fixtures
B) U.S. exports were more capital intensive than exports
C) U.S. exports were less capital intensive than imports
D) U.S. exports were concentrated in agriculture

Question 6

KFC Chicken would be considered at which stage of the international product life cycle theory?

A) First phase (innovation)
B) Second phase (growth of product)
C) Third phase (maturity)
D) Fourth phase (decline)

Question 7

Examples of Classical Economists are all except _________.

A) Adam Smith
B) Thomas Malthus
C) John Stuart Mill
D) Sören Kierkegaard

Question 8

The United States would most reasonably be considered to be in which stage of Rostow's stages of economic growth?

A) Stage Three: Takeoff
B) Stage Four: Meltdown
C) Stage Five: Age of Mass Consumption
D) Stage Six: Decline

Question 9

Which of the following is not part of Galbraith's framework for successfully industrializing a poor economy?

A) Reliable infrastructure system
B) Training and specialized education
C) Capital outflows to developed nations
D) Absence of excessive taxation

Question 10

Which of the following is not part of Amartya Sen's framework for development?

A) Transparency guarantees
B) Social opportunities
C) Economic facilities
D) Political security

Question 11

Mercantilism rose to prominence during the late 19^th century.

Question 12

The terms of trade are a ratio of export prices relative to import prices.

Question 13

Hernando De Soto theorized that foreign land acquisitions were the key to economic development.

Question 14

The higher the resource units required for the production of a product relative to a competitor, the more likely that absolute advantage exists.

Question 15

Under Porter's National Competitive Advantage Theory, a successful domestic industry should stimulate local supplier activity.