International Business and Trade Final Actual Exam Questions and CORRECT Answers
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International Business and Trade
Institution
International Business And Trade
International Business and Trade Final
Actual Exam Questions and CORRECT
Answers
a theory of international business that became popular in the late seventeenth and early
eighteenth centuries in western europe. - CORRECT ANSWER- theory of mercantilism
this theory was based on the notion that...
International Business and Trade Final
Actual Exam Questions and CORRECT
Answers
a theory of international business that became popular in the late seventeenth and early
eighteenth centuries in western europe. - CORRECT ANSWER✔✔- theory of mercantilism
this theory was based on the notion that governments (not individuals deemed untrustworthy)
should become involved in the transfer of goods between nations to increase wealth. -
CORRECT ANSWER✔✔- theory of mercantilism
how was wealth defined during the theory of mercantilism? - CORRECT ANSWER✔✔- an
accumulation of precious metals, especially gold
the two fallacies incorporated in the concept of mercantilism - CORRECT ANSWER✔✔-
first: the incorrect belief that precious metals have intrinsic value when they cannot actually
be used for production or consumption.
second: ignores the concept of production efficiency through specialization. instead of
emphasizing cost-effective production of goods, it emphasizes sheet amassing of wealth with
acquisition of power.
this corrected the first fallacy of mercantilism (the incorrect belief that precious metals have
intrinsic value) by looking at the overall favorable or unfavorable balance of trade in all
commodities, wherein nations attempted to have a positive balance of trade in all goods
produced so that all exports exceeded imports. - CORRECT ANSWER✔✔- neo-mercantilism
this is where nations attempt to correct their trade deficit positions by increasing their exports
or reducing imports so that the outflow of goods balances the inflow. - CORRECT
ANSWER✔✔- balance of trade
how was the second fallacy of mercantilism (disregard for the concept of efficient
production) addressed? - CORRECT ANSWER✔✔- with the classical theory of trade which
rests on the doctrine of comparative advantage
,according to this theory, there is a relationship between the size of the internal market and
average unit cost of production and export competitiveness. - CORRECT ANSWER✔✔-
theory of economic development
according to the theory of economic development, a firm operating in a country where the
domestic market is large will be able to reach a high output level, reaping the advantage of
large-scale production. True or False? - CORRECT ANSWER✔✔- true so much
will lower cost of production increase competitiveness, enabling the firm to make an easy
entry to the export market? if yes, according to what theory? - CORRECT ANSWER✔✔- yes
according to the theory of economic development
is it possible that that the pull of domestic market will be so strong that the export would not
be promoted? - CORRECT ANSWER✔✔- yes according to the theory of economic
development
a more recent and applicable theory of economic development in the 1960s - CORRECT
ANSWER✔✔- Rostow's Stages of Economic Growth Theory
this theory is based on the notion that shifts in the economic development coincided with
abrupt changes within the nations themselves. - CORRECT ANSWER✔✔- Rostow's Stages
of Economic Growth Theory
the five different economic stages for a country according to Rostow's stages of economic
growth theory - CORRECT ANSWER✔✔- 1. traditional society
2. pre-conditions for take-off
3. take-off
4. the drive to maturity
5. the age of high mass consumption
the stage in Rostow's theory which he saw as a static economy likened to the pre-1700s
attitudes and technology experienced by the world's current economically developed
countries. - CORRECT ANSWER✔✔- stage 1: traditional society
, the stage in Rostow's theory he identified as growth. - CORRECT ANSWER✔✔- stage 2:
pre-conditions for take-off
three specific, non-industrial sectors that provided the basis for economic development and
the radical changes in them identified as pre-conditions for take-off. - CORRECT
ANSWER✔✔- 1. increased investment in transportation, which enlarged prospective markets
and increased product specialization capacity.
2. agricultural developments providing for the feeding and nourishing of larger, primarily
urban, population.
3. an expansion of imports into the country.
this stage in Rostow's theory occurs over a period of twenty to thirty years and is marked by
major transformations that stimulate the economy. - CORRECT ANSWER✔✔- stage 3: take-
off
during this stage in Rostow's stages of economic growth theory, barriers to growth are
eliminated within the country, and the concept of economic growth as a national objective
becomes the norm. - CORRECT ANSWER✔✔- stage 3: take-off
the conditions that must be met to achieve the third stage in Rostow's theory: take-off -
CORRECT ANSWER✔✔- 1. net investment as a percentage of net national products must
increase sharply.
2. at least one substantial manufacturing sector must grow rapidly. (this rapid growth and
larger output trickles down as growth in ancillary and supplier industries)
3. a supportive framework for growth must emerge on political, social, and institutional
fronts.
this stage in Rostow's scheme or theory is characterized as one where growth becomes self-
sustaining and a widespread expectation within the country - CORRECT ANSWER✔✔-
stage 4: the drive to maturity
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