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D311 Exam 1 Study Guide Questions and Answers 100% Pass
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D311 Exam 1 Study Guide Questions and Answers 100% Pass What are the trade impacts of free trade agreements? (3) - ANSWER- Trade barriers drop for member countries: Trade creation Trade barriers remain higher for nonmember countries (static): Trade diversion Market size increases (dynamic): T...

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  • November 25, 2024
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  • 2024/2025
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D311 Exam 1 Study Guide Questions
and Answers 100% Pass


What are the trade impacts of free trade agreements? (3) - ANSWER✔✔-

Trade barriers drop for member countries: Trade creation


Trade barriers remain higher for nonmember countries (static): Trade

diversion


Market size increases (dynamic): Trade creation


1/3 of global trade is ___ trade - ANSWER✔✔-intra-firm


Over ___ Foreign Direct Investment per year - ANSWER✔✔-$1.3 trillion


2/3 of FDI stock now in the ___ sector, 1/3 in ___ - ANSWER✔✔-services,

manufacturing


Over ___ trillion in assets of foreign affiliates - ANSWER✔✔-$50


By 2030, ___ economy will be larger than that of the US and EU combined -

ANSWER✔✔-Asia's


Copyright ©EMILLYCHARLOTE 2025 ACADEMIC YEAR, ALL RIGHTS RESERVED. Page 1/46

,___, ____, or ___ annual sales exceed GDP of 50 least developing countries

combined - ANSWER✔✔-Walmart, Exxon-Mobil, Shell's


What are the 3 motives for firms expanding internationally? -

ANSWER✔✔-1. Market motives


2. Economic motives


3. Strategic motives


How do emerging market MNE's (Multinational Entreprises) differ from

Western MNE in motives? (4) - ANSWER✔✔-1. Acquiring strategic assets

to compensate for their weaknesses


2. Seizing market opportunities


3. Institutional arbitrage


4. Seeking resources and commodities


Two types of Market Motives - ANSWER✔✔-1. Offensive motive


2. Defensive motive


Offensive Market Motive - ANSWER✔✔-Seize market opportunities in

foreign countries through trade or investment

Copyright ©EMILLYCHARLOTE 2025 ACADEMIC YEAR, ALL RIGHTS RESERVED. Page 2/46

,Defensive Market Motive - ANSWER✔✔-To protect and hold a firm's

market power or position in the face of threats from domestic rivalry or

changes in government policy


5 Strategic Motives for Firms Expanding Internationally - ANSWER✔✔-1.

Capitalize on distinctive resources or capabilities already developed at

home


2. Establish a strong foothold in a critical foreign market


3. Be the first mover in a target foreign market


4. Benefit from vertical integration involving different countries


5. Follow the company's major customers abroad


3 Economic Motives for Firms Expanding Internationally - ANSWER✔✔-1.

Increase return through higher revenues and/or lower costs


2. Enable the company to benefit from differences in 1) cost of labor 2)

natural resources/raw materials 3) capital 4) talents (science, innovation,

R&D) 5) differences in policy treatment (tax, tariff, treaties)


3. Diversify geographic and eco-political risks


Copyright ©EMILLYCHARLOTE 2025 ACADEMIC YEAR, ALL RIGHTS RESERVED. Page 3/46

, What kind of questions do international trade theories answer? -

ANSWER✔✔-They help understand trade patterns and relationships.

Examples: What products should be traded? How much should be traded?

With whom should trades take place? Should government control trade?


How many international trade theories are there? - ANSWER✔✔-4

categories (interventionist, free trade, national trade patterns, export

dynamics) with 10 theories


Interventionist Theories (2) - ANSWER✔✔-1. Mercantilism


2. Neomercantilism


Free Trade Theories (2) - ANSWER✔✔-1. Theory of Absolute Advantage


2. Theory of Comparative Advantage


Theories to Explain National Trade Patterns (4) - ANSWER✔✔-1. Theory of

Country Size


2. Theory of Economic Size (how much does a country trade)


3. Factor Proportions Theory (what types of products does a country trade)


4. Country-Similarity Theory (with whom do countries trade)


Copyright ©EMILLYCHARLOTE 2025 ACADEMIC YEAR, ALL RIGHTS RESERVED. Page 4/46

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