Chapter 2 - International Trade + Investment

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Introduction to Global Business @ University of Houston w / Alana Aleman
updated 6 years ago by xtinenguyen
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intb 3354
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1

Overall, an average of nearly 70 percent of annual FDI investments have been going into developed countries in recent years, with a majority of this investment occurring in the form of:

acquisitions of existing companies

2

In addition to the four variables—demand conditions, factor conditions, related and supporting industries, and firm strategy, structure, and rivalry—Porter claimed that competitiveness could also be affected by:

government

3

Which of the following states that foreign direct investment is made by firms in oligopolistic industries possessing technical and other advantages over local firms?

Monopolistic advantage theory

4

The theory of _____ postulates that international trade in manufactured goods will be greater between nations with similar levels of per capita income than between those with dissimilar levels of per capita income.

overlapping demand

5

More than half of the exports from developed countries go to _____ countries.

developed

6

Which of the following is the most widely cited and accepted theory of FDI currently?

The eclectic theory of international production

7

In 2008, the dollar value of total world exports was greater than the gross national product of every nation in the world except:

the United States

8

The ability a nation has when it can produce a larger amount of a good or service for the same amount of inputs as can another country or when it can produce the same amount of a good or service using fewer inputs than could another country is known as the theory of:

absolute advantage

9

How does the theory of overlapping demand differ from the theory of comparative advantage?

It does not specify in which direction a given good will go.

10

The one commonality of nearly all of the leading foreign direct investment theories that is supported by empirical tests is that the major part of direct foreign investment is made by large, research-intensive firms in oligopolistic industries.

True

11

In 2008, the dollar value of total world exports was greater than the gross national product of every nation in the world including the United States.

False

12

A critical factor contributing to high TDI scores is trade liberalization.

True

13

_____ is an economic philosophy based on the belief that (1) a nation's wealth depends on accumulated treasure, and (2) to increase wealth, government policies should promote exports and discourage imports.

Mercantilism

14

Adam Smith argued against mercantilism by claiming that market forces, not government controls, should determine the direction, volume, and composition of international trade.

True

15

Approximately 70 percent of exports from developed economies go to developing countries, not to other industrialized nations.

False