Bellner BUSMHR 2000 Exam 2 (Final) Questions and Correct Answers the Latest Update and Recommended Version
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Course
BUSMHR 2000
Institution
BUSMHR 2000
National industrial policy
→ A proactive economic development plan a government initiates to build or strengthen a
particular industry.
Mercantilism
→ The belief that national prosperity is the result of a positive balance of trade,
achieved by maximizing exports and minimizing imports.
...
Bellner BUSMHR 2000 Exam 2 (Final)
Questions and Correct Answers the Latest
Update and Recommended Version
CH 5
→ Theories of International Trade and Investment
National industrial policy
→ A proactive economic development plan a government initiates to build or strengthen a
particular industry.
Mercantilism
→ The belief that national prosperity is the result of a positive balance of trade,
achieved by maximizing exports and minimizing imports.
Internalization theory
→ An explanation of the process by which firms acquire and retain one or more value-
chain activities inside the firm, minimizing the disadvantages of dealing with external
partners and allowing for greater control over foreign operations.
Industrial cluster
→ A concentration of businesses, suppliers, and supporting firms in the same industry at a
particular location, characterized by a critical mass of human talent, capital, or other
factor endowments.
Free Trade
→ Relative absence of restrictions to the flow of goods and services between nations.
→ Assets or capabilities of a firm that are difficult for competitors to imitate. They are
typically derived from specific knowledge, competencies, skills, or superior strategies.
→ ex: knowledge, capabilities, skills, strategies, networks, assets
Comparative advantage principle
→ It may be beneficial for two countries to trade with each other as long as one is
relatively more efficient at producing a product needed by the other.
Comparative advantage
→ Superior features of a country that provide unique benefits in global competition,
typically derived from either natural endowments or deliberate national policies.
→ ex: resources, land, location, climate, labor (low cost & skilled)
Absolute advantage principle
→ The idea that a country benefits by producing only those products it can produce using
fewer resources.
National Classical Theories
→ -Mercantilism
→ -Absolute Advantage Principle
→ -Comparative Advantage Principle
→ -Factor Proportions Theory
→ -International Product Life Cycle Theory
→ -New Trade Theory
National Contemporary Theories
→ -Competitive Advantage of Nations
→ -Michael Porter's Diamond Model
→ -National Industrial Policy
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