Question 1 1 pts International trade theories are categorized into two groups, classical and modern theories. The main difference is that classical theories explain the mechanisms of global trade from the perspective of a from the perspective. () company, firm () country, company O company, country ) firm, country Question 2 1 pts The theory that states that the objective of each country is to have a trade surplus (the difference between exports and imports), which should be help by the amount of the country's gold and silver holdings is called () comparative advantage theory () product life cycle theory () absolute advantage theory ) mercantilism theory Question 3 1 pts This theory encourages specialization and, therefore, generating efficiencies through increasing the skills of the labor force and improving production methods. It recommends a country to focus on producing a good more efficiently than another nation. According to this theory, the wealth of a nation is measured not by how much gold and silver it has but instead by the living standards of its people. The theory is called (O product life cycle theory () absolute advantage theory () comparative advantage theory (O mercantilism theory Question 4 1 pts Country A is efficient in producing corn and green beans. In fact, it is more efficient in producing these two products that any of the neighboring countries. Country B has been producing both products also very efficiently but not as efficiently as country A. Suggest the best solution for country A agricultural activity based on the comparative advantage theory. (O Choose which product provides highest income for the same amount of resources and specialize in that product. Export the surplus and import the second product from country B. (O Continue to produce both products because the country has absolute advantage in both preducts. There is no reason to trade with country B whose crops are not as efficiently produced. (O Continue growing corn only; trade with country B and import green beans. (O Continue growing green beans only; trade with country B and import corn. Question 5 1 pts The Factor Proportions Theory states that countries would produce and export goods that required factors of production that were in great supply and, therefore, are cheaper production factors. Countries would import goods that required resources that were in short supply, but higher demand. Which of the examples below is NOT illustrating this theory? (O iPhones and iPads, although being high-tech products, are assembled mainly by hand. Hence, manufacturing facilities are located in China, where exists a large pool of labor. (O The Industrial and Commercial Bank of China Limited is the largest bank in the world based on its asset size. (O Many US call centers were moved to India due to availability of affordable English-speaking labor force. () Cheap labor and lack of labor regulations resulted in growth of textile and garment manufacturing in Bangladesh. The country is now the second largest textile and garments exporter in the world after China. Question 6 1pts You are a manager in a company that has been successful in selling the product in the USA for the number of years. You now consider exporting your product to either Canada or Mexico due to the proximity of these countries to your location. According to the Country Similarity Theory, you should () Export to Mexico due to having absolute advantage in producing this product. (O Export to Mexico due to having comparative advantage in producing this product. () Export to Canada due to lack of competition in Canada for your product. () Export to Canada due to the similarities between the countries in terms of customer preferences and similar per capita (per person) incomes. Question 7 1 pts Michael Porter's theory on national competitive advantage links together the nation's market resources and capabilities, local market demand conditions, local suppliers and complementary industries, and local firm characteristics. Porter states that these factors affect a nation's competitiveness in an industry because its depends on the capacity of the industry to innovate and upgrade. Interestingly, Porter also added the role of the industries due to their ability to increase the competitiveness of firms and industries through their actions and policies. in the national competitiveness of () stockholders () consumers (O governments () suppliers Question 8 1 pts There are over ten major types of governments, each consisting of multiple variations along the continuum from anarchism (lack of public government) to totalitarianism (strong central government controls all aspects of an individual's life). The combination of both forms is called ___ are ________ politically. and most countries (O democracy; authoritarian () autocracy; authoritarian () pluralism; democratic (O pluralism; pluralistic Question 9 1 pts There are three main kinds of legal systems - commeon law, civil law, and religious (theocratic) law. Most countries have a combination of these systems, creating hybrid legal systems. A legal system that is based on a detailed set of laws that constitute a code and focus on how the law is applied to the facts is called (O autocratic law O civil law () common law () religious law Question 10 1 pts A legal system that is based on traditions and precedence, where judge interprets the law and judicial rulings can set precedent which will be used in the future similar cases is called (O theocratic law (O common law () religious law O civil law Question 11 1 pts A legal system that is based on religious guidelines derived from the nation's Holy Books is called religious (theocratic) law. The most commonly known example of religious law is _ (O Jewish law, or Halacha (O Christian Canon, practiced by the Vatican City O Islamic law, or Sharia () theocratic law, practiced by nations and communities Question 12 1 pts Government intervenes in free trade through several key policy areas that can be used to create rules and regulations to control and manage trade between nations. One example of such policies are taxes imposed on imports, also known as __ () tariffs () export guotas (O subsidies () import quotas Question 13 1 pts Government intervenes in free trade through several key policy areas that can be used to create rules and regulations to control and manage trade between nations. One example of such policiesare _______, which is a form of government payment to a producer. (O local content requirements (O subsidies (O antidumping rules (O currency controls Question 14 1 pts In an effort to aid local economy, a government may require that a certain percentage of a product or an item be manufactures or "assembled\" locally, or require a domestic partner to conduct business. This policy is called (O administrative policy (O currency control (O foreign direct investment (O local content requirement Question 15 1 pts In an effort to promote trade with other countries, government may create _ procedures, or restrictions. o ,which are characterized by reduced tariffs, taxes, customer, () subsidy zones (O currency zones (O free-trade zones (O antidumping zones Question 16 1 pts There are two kinds of FDI that are increasingly applicable to global firms. Greenfield FDI occurs when a multination corporation (MMNC) building new factory or store from scratch. Why do FDI-receiving countries offer prospective companies tax breaks, subsidies and other incentives to set up greenfield investments? (O Because the receiving country desires to move from agriculture to manufacturing. (O Because FDI means spread of democracy in the developing world. (C) Because the investing firm creates new long-term jobs, expands local technical knowledge, and increase the country's overall economic standards. (O Because FDI is less expensive and can be implemented faster. Question 17 1 pts Brownfield FDI is usually less expensive and can be implemented faster; however, there are many challenges that the company may face. Which one is NOT one of such challenges? (O cultural differences (O outdated equipment and processes (O existing employees (O existing production facilities