Chapter 2 International Trade and Foreign Direct Investment True/False Questions 1. The classical international trade theories are from the perspective of a country. True; Easy 2. Trade surplus refers to a situation where the value of imports is greater than the value of exports. False; Easy 3. The economic theory of mercantilism stated that a country’s wealth was determined by the amount of its gold and silver holdings. True; Easy 4. Trade deficit refers to a situation
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Overview trade theories International Economics Classical trade theories Explanation Absolute advantage theory (Smith) * When one nation is more efficient than another in the production of one commodity but is less efficient than the other nation in producing a second commodity‚ then both nations can gain by each specializing in the production of the commodity of its absolute advantage (most efficient commodity) and exchanging part of its output with the other nation for the commodity of
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HOMEWORK 11 (Last HW – Due 4/28) Read the Logitech case and answer the following questions. 1: In a world without trade‚ what would happen to the costs that American consumers would have to pay for Logitech’s products? 2: Explain how trade lowers the costs of making computer peripherals such as mice and keyboards. 3: Use the theory of comparative advantage to explain the way in which Logitech has configured its global operations. Why does the company manufacture in China and Taiwan‚ undertake
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registered trade union or federation of trade unions and employers organization in international and domestic law. What limitations are placed on the rights of such unions both internationally and locally. Certain rights accrue to registered trade union or federation of trade unions and employers’ organizations in international and domestic law. There are however limitations placed on the rights of such unions both internationally and locally. Section 5 of the Trade Unions
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Mercantilism is characterized by the country applying policies and institutions such as the Navigational Acts‚ towards having a favorable balance of trade‚ extending borders‚ and having all of the economic goals set towards enriching the mother country. Having a favorable balance of trade was essential to mercantilism. A favorable balance of trade meant that there were more goods leaving the country to be sold (exports) than there were goods coming into the country to be bought (imports). This
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Unit 2 Test International Trade in the Modern World Part A: True and False (15 Marks) / 15 Answer the following questions with true (T) or false (F). Correct the false statements T T 1.___ T T Positive effects of globalization include: improved human rights‚ increased productivity‚ and innovation. 2.___ F F Trade agreements are beneficial because they eliminate trade barriers and encourage foreign investment. 3.___ The North American Free Trade Agreement (NAFTA)
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TUTORIAL 9 Chapter 19: A Macroeconomic Theory of the Open Economy Multiple-Choice Questions 1. The purchase of a capital asset adds to the demand for loanable funds a. only if the asset is located at home. b. only if the asset is located abroad. c. whether the asset is located at home or abroad. d. None of the above is correct. 2. If the quantity of loanable funds demanded is greater than the quantity of loanable funds supplied a. there is a surplus and the interest rate will rise.
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(a) Discuss the absolute advantage theory and its relevance to international trade. John Solman and Mark Sutcliffe‚ Economics of Business‚ states that “that the reasons for international trade are just extensions of the reasons for trade within a nation and that instead of people or countries being self-sufficient it makes more sense to specialize in different trades’. Solman and Sutcliff advised that ‘firms or companies usually specialize in certain types of goods or services which allow them
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related articles; suggestions may be available. (February 2009) The product life-cycle theory is an economic theory that was developed by Raymond Vernon in response to the failure of theHeckscher-Ohlin model to explain the observed pattern of international trade. The theory suggests that early in a product’s life-cycle all the parts and labor associated with that product come from the area in which it was invented. After the product becomes adopted and used in the world markets‚ production gradually
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several contractual obligations. Contractual Precedence It seems as though Mr Williams believes that Mr Wu is in breach of contract due to the non-delivery of goods‚ as is stipulated in the United Nations Convention on the Contracts for the International Sale of Goods (CISG) . However‚ the contract between Mr Williams and Mr Wu states that the conditions as to delivery are ex-warehouse‚ meaning that by placing the goods in a warehouse accessible to Mr Williams‚ Mr Wu has completed his obligations
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