WSU International Business Exam 2024 with Guaranteed Accurate Answers

International Trade - correct answer The purchase, sale or exchange of goods and services across national borders. Mercantilism - correct answer a trade theory that states that nations should accumulate financial wealth, usually in the form of gold, by encouraging exports and discouraging imports. Theory of Absolute Advantage - correct answer The ability of a nation to produce a good more efficiently than any other nation Theory of Comparative Advantage - correct answer The inability of a nation to produce a good more efficiently than any other nation but an ability to produce that good more efficiently than it does any other good Focus is on the productivity of the production process for a particular good. Factor Proportions Theory - correct answer States that countries produce and export goods that require resources (factors) that are abundant and import goods that require resources in short supply. Key driver of exporting goods is the abundant and thus cheapest factors of production-not productivity. Leontief Paradox - correct answer •Found evidence opposite of that predicted by factor proportions theory •US exports are more labor intensive than US imports •Findings are supported by more recent research •One reason for this paradox could be that factor proportions theory assumes a nation's production factors to be homogenous •The theory seems to be supported when expenditures on labor are taken into account International Product Lifecycle Theory - correct answer States that a company will begin by exporting its product and later undertake foreign direct investment as the product moves through its life cycle. New Trade Theory - correct answer Theory States: •There are gains to be made from specialization and increasing economies of scale •The companies first to market can create barriers to entry •Government may p