IBUS 3001 Midterm Questions – 100% Correct, Expert Verified Answers with A+ Grade Assurance

IBUS 3001 Midterm Questions – 100% Correct, Expert Verified Answers with A+ Grade Assurance globalization ANSW a process of economic integration by the increase of trade, foreign direct investment, and immigration Globalization critics argue that the decline in unskilled wage rates is due to the ANSW migration of low-wage manufacturing jobs offshore the stock of foreign direct investment refers to ANSW the total cumulative value of foreign investments Which of the following expresses one of the reasons why managing an international firm is different from managing a purely domestic business? ANSW An international business must find ways to work within the limits imposed by government intervention in the international trade and investment system Globalization resulted in a decrease in non-US firms' investment across national borders. True or False? ANSW False mercantilism ANSW An economic policy under which nations sought to increase their wealth and power by encouraging exports and discouraging imports. Leads to inflation, based on a view of trade as a zero-sum game. free trade ANSW when the government does not attempt either to reduce or to increase the levels of exports and imports that occur naturally as a result of supply and demand new trade theory ANSW countries specialize in the production and export of particular goods not because of underlying differences in factor endowments, but because for certain industries, the world market can only support a limited number of firms. This theory promotes some limited government intervention absolute advantage ANSW in the production of a product when it is more efficient than any other country in producing it comparative advantage ANSW The ability of a country to produce a good at a lower cost than another country can. Produce goods at the lower opportunity cost, and buy goods with the highest opportunity costs positive sum game ANSW all countries can benefit from trade Heckscher-Ohlin theory ANSW comparative advantage is the result of factor endowments - more endowment in a factor means lower costs Leontief paradox ANSW the US should export more capital intensive products and import labor intensive ones, but it's exports are less labor intensive than imports product life cycle theory ANSW US develops new product → demand in developed countries grows → Foreign producers begin producing product → US firms set up facilities in other developed countries → product becomes standardized → Other countries with lower costs export to US → Developing countries develop production advantage → Production concentrates in lower cost countries US is importer of product economies of scale ANSW unit cost reductions associated with large scale output - the more you produce, the cheaper each unit is