Mercantilism
The first theory of international trade, mercantilism, emerged in this nation during the mid-sixteenth century.
What is England?
Wrote the landmark book The Wealth of Nations in 1776.
Who is Adam Smith?
The economists Eli Heckscher and Bertil Ohlin, who put forward a different explanation of comparative advantage, hailed from this nation.
What is Sweden?
He introduced the Product-Life Cycle theory in the mid-1960s.
Who is Raymond Vernon?
The New Trade Theory emerged dring this decade.
What is the 1970s?
These two elements were the currency of trade between countries and essential to vigorous commerce.
What are Gold and Silver?
Adam Smith argued that countries should specialize in the production of goods that they can produce more efficiently than others and then trade these goods for those produced by other countries.
What is Absolute Advantage?
The extent to which a country is blessed with resources such as land, labor, and capital.
What is factor endowments?
For most of the 20th century, many of the world's new products were developed and sold here first.
What is the United States?
The theory suggests that in some industries there will likely only be a few firms that make a profit because of this concept.
What is economies of scale?
These two nations have been accused of adopting neo-mercantilist strategies that are designed to simultaneously boost exports and limit imports.
What are the United States and China?
Took Adam's Smith's theory one step further in his 1817 book Principles of Political Economy.
Who is David Ricardo?
What is the pattern of international trade?
True or false. The theory's relevance in the modern world is more limited.
What is True?
The economic and strategic advantages that benefit early entrants in an industry.
What are first-mover advantages?
It is in a country's best interest to export more than it imports (this is referred to as what term).
What is a trade surplus?
The theory that suggests that trade is positive-sum game in which all countries that participate realize economic gains.
What is Comparative Advantage?
The Heckscher-Ohlin Theory attempts to explain the pattern we observe in the world economy today.
What is the pattern of international trade?
The majority of Apple products are manufactured in China, but these two nations are also growing in importance.
What is India and Vietnam?
True or false. The theory suggests that a country may not benefit from trade if they do not differ in resource endowments or technology.
What is false?
The flaw with mercantilism is that a gain by one country results in a loss by another.
What is a zero-sum game?
What is Free Trade?
One of the many tests that raised questions about the validity of the Heckscher-Ohlin Theory.
What is the Leontief Paradox?
This concept weakens the Product-Life Cycle Theory.
What is globalization?
True or false. A nation may predominate in the export of a good simple because it was lucky enough to have one or more firms among the first to produce that good.
What is true?