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Q:
Adam Smith claimed that:
A. governments, not market forces, should determine the directions, volume, and composition of international trade.
B. a nation could trade advantageously if it had a comparative advantage.
C. market forces, not government controls, should determine direction, volume, and the composition of international trade.
D. customers' tastes are affected by income levels.
E. two of the above.
Q:
Mercantilists believed that:
A. merchants should import goods to raise the level of living.
B. governments should lower import duties.
C. a nation should have an export surplus in order to accumulate precious metals.
D. a nation should produce goods for which there is a comparative advantage.
E. two of the above.
Q:
Supporters of mercantilism:
A. viewed accumulation of precious metals as an activity essential to a nation's welfare.
B. viewed industrial development as the primary source of a nation's wealth.
C. promoted trade policies that generally benefited consumers and emerging industrialists.
D. all of the above.
E. two of A, B, and C.
Q:
Many of the Asian countries that are major exporters to the United States are also significant importers of American goods because:
A. their rising standards of living enable their people to afford more imported products.
B. they are purchasing large amounts of capital goods to further their industrial expansion.
C. they are importing raw materials and components that will be assembled and subsequently be exported, often to the United States.
D. all of the above.
E. two of A, B, and C.
Q:
The three nations that exported the largest amount of goods to the United States in 2010 were:
A. Japan, Canada, and China.
B. China, Mexico, and the UK.
C. Japan, China, and Saudi Arabia.
D. Canada, Japan, and Mexico.
E. Canada, Mexico, and China.
Q:
The three largest markets for American exports of goods in 2010 were:
A. Japan, the UK, and China.
B. Japan, Mexico, and the UK.
C. Canada, Mexico, and China.
D. Canada, Japan, and the UK.
E. Japan, Mexico, and China.
Q:
When considering where to export, advantages to managers of focusing on a nation that is already a sizable purchaser of goods coming from the home country include:
A. the political climate in the importing nation is relatively stable.
B. there are abundant natural resources in the importing nation.
C. satisfactory transportation facilities have already been established.
D. all of the above.
E. two of A, B, and C.
Q:
When considering where to export, advantages to managers of focusing on a nation that is already a sizable purchaser of goods coming from the home country include:
A. the cultures of the two countries should be relatively similar and compatible.
B. the climate for foreign direct investment in the importing nation is relatively favorable.
C. export and import regulations are not insurmountable.
D. all of the above.
E. two of A, B, and C.
Q:
More than half of the exports from developing nations go to developed nations, and:
A. this proportion has been declining over the past 35 years.
B. approximately 70 percent of exports from developed economies also go to other industrialized nations.
C. the proportion of world trade accounted for by members of regional trade agreements has grown to nearly 50 percent.
D. all of the above.
E. two of A, B, and C.
Q:
More than one-half of the exports from developing countries go to __________ countries, and this proportion has been _____________ over the past 35 years.
A. developed; increasing
B. developing; increasing
C. developed; decreasing
D. developing; decreasing
E. none of the above
Q:
In examining the volume of international trade:
A. the proportion of manufacturing value added generated by South and East Asia has quadrupled since 1980.
B. the proportion of manufacturing value added generated by Latin America has doubled since 1980.
C. the proportion of world exports and imports accounted for by the 10 largest exporting and importing nations exceeded 70 percent in 2010.
D. all of the above.
E. two of A, B, and C.
Q:
The rapid expansion of world exports since 1980 demonstrates that:
A. businesspeople must be prepared to meet increased competition.
B. domestic business cannot compete with cheap imports.
C. the opportunity to increase sales by exporting is a viable growth strategy.
D. all of the above.
E. two of A, B and C
Q:
The proportion of world commercial services exports accounted for by ____________ has evidenced an overall decline since 1980.
A. Asia
B. the Middle East
C. Latin America
D. all of the above
E. two of A, B, and C
Q:
The proportion of world commercial services exports accounted for by ___________ has evidenced an overall decline since 1980.
A. the European Union
B. Africa
C. the United States
D. all of the above
E. two of A, B, and C
Q:
Between 1980 and 2010, the level of merchandise exports from Africa:
A. doubled as a proportion of overall world merchandise exports.
B. increased by 250 percent.
C. declined by half.
D. grew more rapidly as a proportion of world merchandise exports than did the European Union.
E. two of the above.
Q:
The level of services exports in 2010, worldwide, was:
A. $3.7 trillion.
B. $8.5 trillion.
C. $15.2 trillion.
D. $18.9 trillion.
E. $23.4 trillion.
Q:
The level of merchandise exports in 2010, worldwide, was:
A. $3.7 trillion.
B. $8.5 trillion.
C. $15.2 trillion.
D. $18.9 trillion.
E. $23.4 trillion.
Q:
In examining the volume of international trade:
A. exports of merchandise grew nearly fivefold between 1990 and 2010.
B. exports of services grew more than 10-fold between 1980 and 2010.
C. the proportion of world exports of commercial services accounted for by the United States fell by nearly 20 percent between 1980 and 2010.
D. all of the above.
E. two of A, B, and C.
Q:
One measure of the magnitude of international trade and how it has grown is that _____________ of everything grown or made in the world is now exported.
A. 10 percent
B. 25 percent
C. 32 percent
D. 45 percent
E. over two-thirds
Q:
Regarding the volume of international trade, exports of goods and services ___________ in 2010.
A. were nearly $4.0 trillion
B. reached $5.8 trillion
C. were $10.4 trillion
D. were nearly $19.0 trillion
E. exceeded $24.5 trillion
Q:
According to the Exporter Data Base, small and medium-sized enterprises accounted for ___________ of all U.S. exporters.
A. under 10 percent
B. 25 percent
C. nearly half
D. 86 percent
E. nearly 98 percent
Q:
The major part of foreign direct investment is made by large, research-intensive firms in oligopolistic industries.
Q:
Dunning's eclectic theory of international production provides an explanation for the choice by the international firm of its overseas production facilities.
Q:
The dynamic capability theory states that for a firm to invest overseas, it must have three kinds of advantages: ownership specific, internalization, and location specific.
Q:
Internalization theory suggests that what an organization is good at should not be outsourced without very careful consideration.
Q:
Foreign direct investment may be an attempt by foreign companies to establish competitive advantage over potential competitors in other markets, due to possession of advantages not available to local firms. Such advantages possessed by foreign companies over their local competitors include knowledge about local market conditions and cost efficiencies from operating at a distance.
Q:
Developed by the United Nations Conference on Trade and Development, the Trade and Development Index is a tool whose goal is to assist efforts "to systematically monitor the trade and development performance of developing countries with a view to facilitating national and international policies and strategies that would ensure that trade serves as a key instrument of development."
Q:
Historically, foreign direct investment has followed foreign trade, and one reason is that foreign trade is typically less costly and less risky than making a direct investment into foreign markets.
Q:
If a nation is continuing to receive appreciable amounts of foreign investment, its investment climate must be favorable.
Q:
Industrialized nations invest primarily in one another just as they trade more with one another.
Q:
Historically, approximately two-thirds of the value of corporate investments made in the United States from abroad has been spent to acquire going companies rather than to establish new ones.
Q:
An important development in the level of worldwide FDI is the emergence of what has been called the "bamboo network" of ethnic Chinese family businesses based outside China.
Q:
Reflecting their continued economic development, developing countries have dramatically increased their share of FDI stock, from 1 percent in 1980 to 14 percent in 2010.
Q:
The proportion of the outstanding stock of foreign direct investment accounted for by the United States declined by two-thirds between 1980 and 2010.
Q:
The book value, or the value of the total outstanding stock, of all foreign direct investment worldwide was $19 trillion at the beginning of 2010.
Q:
Direct investment refers to overseas purchases of stocks and bonds to gain a return on the funds invested.
Q:
Portfolio investment is the purchase of sufficient stock in a firm to obtain significant management control.
Q:
International trade theory shows that nations will attain a higher level of living by specializing in goods for which they possess a comparative advantage and importing those for which they have a comparative disadvantage.
Q:
The primary reason for international trade is a lack of natural resources in the developed nations.
Q:
According to the text, differences in taste, a demand variable, can reverse the direction of trade predicted by the theory.
Q:
A nation's relative ability to design, produce, distribute, or service products within an international trading context, while earning increasing returns on its resources, is known as national competitiveness.
Q:
Michael Porter claims that demand conditions, factor conditions, related and supporting industries, and firm strategy, structure, and rivalry, rather than government and chance, are factors that affect national competitiveness.
Q:
Linder's theory of overlapping demand explains the direction of trade for minerals and agricultural products.
Q:
Currency devaluation helps a nation avoid losing markets and regain competitiveness in world markets.
Q:
The price of one currency stated in terms of another currency is the exchange rate.
Q:
Some observers have argued that American industry and the American economy as a whole will be strengthened by offshoring activities to workers in India or other nations that have comparative advantages in areas such as labor costs.
Q:
An arrangement in which one or more activities that could be provided in-house are instead provided by another company is offshoring.
Q:
If a Chinese worker earns $1 a day, then goods produced by this worker will cost less than the same goods produced by an American earning $18 an hour.
Q:
According to the theory of comparative advantage, a nation can gain from trade if it is not equally less efficient in producing two goods.
Q:
Adam Smith explained how countries can benefit from international trade even if they lack any absolute advantage over their trade partners.
Q:
The theory of absolute advantage suggests that under free, unregulated trade, each nation should specialize in producing those goods it can produce most efficiently.
Q:
Arguments in support of mercantilism largely disappeared after the end of the mercantilist era in the late 1700s.
Q:
The central idea of mercantilism is that there should be an export surplus so a nation can accumulate precious metals.
Q:
The first formulation of international trade theory, by Adam Smith, was motivated by political considerations.
Q:
China, Mexico, and Japan are the three largest trading partners of the United States, in terms of the total volume of imports and exports.
Q:
There are a number of advantages in focusing attention on a nation that is already a sizable purchaser of goods coming from the would-be exporter's country.
Q:
The development of expanded regional trade agreements, such as the Association of Southeast Asian Nations, Mercosur, and the EU, can substantially alter the level and proportion of trade flows within and across regions.
Q:
Approximately 70 percent of the exports from developed countries go to developed countries.
Q:
Both developed nations and developing nations tend to trade more with developed nations.
Q:
In 2009, the top 10 exporting and importing nations collectively accounted for over half of all exports and imports of merchandise and services worldwide.
Q:
The proportion of merchandise exports coming from Asia increased by over 90 percent between 1980 and 2010, with China accounting for nearly two-thirds of that increase.
Q:
The level of merchandise exports coming from Africa decreased between 1980 and 2010.
Q:
The proportion of merchandise exports coming from Latin America and the Middle East decreased between 1980 and 2010.
Q:
Globally, the overall level and rate of growth of merchandise exports exceed those of commercial services.
Q:
The magnitude of international trade and how it has grown are reflected in the fact that one-fourth of everything grown or made in the world is now exported.
Q:
The dollar value of total world exports in 2010 was greater than the gross national product of every nation in the world except China.
Q:
International firms must export their products or services in order to establish and expand their overseas operations.
Q:
Importing and foreign direct investment are two approaches to meeting overseas demand.
Q:
International trade includes exports, imports, and foreign direct investment.
Q:
Small and medium-sized enterprises accounted for nearly one-third of all U.S. exporters.
Q:
Record levels of American outward foreign direct investment from 2000 to 2009, totaling more than $2 trillion, caused U.S. exports to decline during this time period.
Q:
Identify the seven dimensions along which management can globalize in organizing their international activities.
Q:
Explain the different reasons for firms to enter foreign markets.
Q:
Discuss the arguments supporting and opposing globalization of trade and investment.
Q:
Identify and discuss the five major kinds of drivers that are leading international firms to the globalization of their operations.
Q:
Discuss the three environments in which an international company operates.
Q:
The international business manager can choose to:
A. transfer a management practice intact.
B. transfer and adjust a management practice.
C. not transfer a management practice at all.
D. two of A, B, and C.
E. all of A, B, and C.
Q:
According to the text, the dimensions along which management can globalize (standardize) their company's international activities include:
A. markets.
B. competitive strategy.
C. political exposure.
D. all of the above.
E. two of A, B, and C.
Q:
Reasons for international firms to enter into foreign markets are linked to which of the following desires?
A. Increased sales and reduced costs
B. Protecting sales and profits from being eroded by competitors
C. Creation of new markets.
D. All of the above.
E. Two of A, B, and C.
Q:
According to the text, the reasons international firms enter foreign markets are linked to:
A. the desire to increase profits and sales.
B. the desire to invest excess capital from domestic markets.
C. the desire to protect profits and sales from being eroded by competitors.
D. all of the above.
E. two of A, B and C.