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Exam 2: Theories of International Trade and Investment

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Question 1

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Kazmia Revitalization The leaders of Kazmia, a small nation in the southern hemisphere, have called a meeting to discuss ways to encourage foreign firms to invest in Kazmia. The country was once a leader in diamond mining and exports; however, the diamond mines have been depleted. Meanwhile the standard of living in Kazmia has plummeted to its lowest level, and young people are fleeing the country. Government leaders must devise a plan to reinvigorate the once prosperous nation. -Which of the following actions by the government would be the most beneficial for the long-term economic security of Kazmia?

A) encouraging renewed investment in the mining industry
B) developing an infrastructure of communications, technology, and transportation
C) discouraging trade relations until the nation is fiscally stable
D) passing laws and establishing regulatory systems to monitor MNE activities

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B

Question 2

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National industrial policies typically involve the creation of bureaucratic regulatory systems which discourage citizens from seeking advanced education.

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Question 3

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In a short essay, describe the two leading theories of international trade and investment. What do economists and scholars hope to learn from an analysis of international trade and investment?

Which of the following statements is a characteristic of a competitive advantage?

Which of the following is not an element of Porter's Diamond Model?

All of the following are typical examples of ownership-specific advantages except ________.

The earliest efforts to explain international business emerged in the early 20th century.

Collaborative ventures became a popular entry strategy in the 1980s. Describe the two major types of international collaborative ventures and explain the benefits of this internationalization approach.

Mercantilism Assignment The final assignment for Daniel Parilla's international business class involves taking an in-depth look at one of the five classical perspectives that explain the rationale for international trade. Daniel plans to present an argument in favor of mercantilism. Daniel will be attempting to convince his classmates that mercantilism leads to national prosperity. Daniel's peers will be given opportunities to counter his argument. -One of Daniel's classmates most likely counters Daniel's argument with which of the following statements?

In the internationalization process, most firms do not engage in ________.

According to the factor proportions theory, nations with an ample labor supply of low-skill labor, such as Mexico, should ________.

Modern international trade is hindered by all of the following except ________.

Kazmia Revitalization The leaders of Kazmia, a small nation in the southern hemisphere, have called a meeting to discuss ways to encourage foreign firms to invest in Kazmia. The country was once a leader in diamond mining and exports; however, the diamond mines have been depleted. Meanwhile the standard of living in Kazmia has plummeted to its lowest level, and young people are fleeing the country. Government leaders must devise a plan to reinvigorate the once prosperous nation. -Which of the following countries would provide the best example for Kazmia for achieving substantial national competitive advantage?

An industrial cluster can best be described as ________.

Which of the following is a benefit of internalizing foreign-based value-chain activities?

The total value of assets that MNEs own abroad through their investment activities is measured in FDI stock.

According to Dunning's eclectic paradigm, an MNE must meet three conditions before successfully entering a foreign market via foreign direct investment (FDI). Explain these conditions in a short essay.

Which of the following terms is used to refer to a collaborative venture which results in a new legal entity?

In Adam Smith's opinion, mercantilism has a positive impact on a nation's wealth because it makes many wealthy people wealthier.

Considering the relative efficiency held by nations led to which of the following concepts regarding the rationale for international trade?