GMB 6055(A) INTERNATIONAL BUSINESS AND TRADE MID-SEMESTER EXAMINATIONS Instructions: Answer TWO questions in ALL. Question ONE is compulsory. Time Allowed 3 hours. Question ONE (40 marks) (i) "Environment is the sum total of all the forces surrounding and influencing the life and development of the firm" Critically assess the environment in which a firm operating across borders must deal with. ii) Evaluate "Pax Romana" as having been a major stimulus to international business. (iii) What were the assumptions of factor proportions theory? Question TWO (30 marks). (i) "Mercantilists mixed exchange through trade with wealth" Compare and contrast the mercantilist philosophy concerning trade with Adam Smith's approach. (ii) What were the shortcomings of mercantilism? Question THREE (30 marks) "Diverging significantly from traditional approaches, Vernon focused on the product rather than on a country and its factor endowments". Verify this statement by explaining the different path taken by Raymond Vernon to explain the theory of trade and investment. Question FOUR (30 marks) i)" The difficulties in empirically validating the factor proportion theory, led Steffan Linder to explain the determinants of trade based on the demand side rather than on the supply side". Discuss. ii) "Internal and external economies of scale explain how