Trade Theory
Domestic demand, domestic rivalry, and factor endowments are factors in _______ theory of why nations achieve success in particular industries.
Who is National Competitive Advantage (Diamond Theory Porter)
Regional economic integration can be seen as an attempt to achieve additional gains from the free flow of trade and investment between countries. TRUE / FALSE
What is TRUE
Compared to licensing, FDI provides more direct and tighter control over foreign operations. TRUE / FALSE
What is True
A quota on trade imposed by the exporting country, typically at the request of the importing country's government is referred to as a(n)
What is Voluntary Export Restraint (VER)
__________ are the oldest and simplest instrument of trade policy.
What is tariffs
The product life cycle theory was developed by
Who is Raymond Vernon
The EU is an example of
What is economic union
One of the primary cost of FDI to home countries
What is capital outflow and job loss
Refers to an industry dominated by a small number of players.
What is oligopoly
Allows parties to buy and sell currencies now for future delivery.
What is forward transactions.
_______ is a situation in which one country is more efficient at producing a product than any other country.
What is Absolute Advantage
A ______ eliminates trade barriers between member countries and adopts a common external trade policy.
What is customs union
A _____ keeps track of a country's payments to and its receipts from other countries.
Balance of Payments
This helped strengthen trade dispute settlement mechanisms.
What is WTO
Under mercantilism, countries strives to maintain
What is high exports and low imports / trade balance surplus
A situation in which a country specializes in producing the goods it produces most efficiently and buys the products it produces less efficiently from other countries, even if it could produce the good more efficiently itself is referred to as:
What is Comparative Advantage
A group of countries that use a common currency.
What is monetary union
A firm moves upstream or downstream in different value chain stages in host country through FDI
What is vertical FDI
When a country has a strong currency relative to other nations imports are _______relative to domestic products
What is less expensive
Rules detailing that a certain portion of the value of goods made in one country must originate from that country.
The international product life cycle states that during this stage a company directly invest in production facilities in other developed countries where demand is great enough to warrant production facilities?
What is maturing product stage
Represents the greatest degree of regional integration.
What is Political Union
One of the primary disadvantages of FDI to host countries
What is loss of sovereignty.
Imports sold below cost in order to unfairly drive domestic firms out of business
What is dumping
Politically motivated trade sanctions against foreign countries to signal displeasure.
What is trade embargo.