#1
Which international trade theory suggests that countries should specialize in the production of goods they can produce most efficiently?
Heckscher-Ohlin theory
Absolute advantage theory
Comparative advantage theory
Theory of international product life cycle
#2
Which term describes the situation where a country exports more goods than it imports?
Trade surplus
Trade deficit
Balance of payments
Current account
#3
Which international trade theory emphasizes the role of factors of production, such as labor and capital, in determining comparative advantage?
Heckscher-Ohlin theory
Absolute advantage theory
Comparative advantage theory
Theory of international product life cycle
#4
What is the term for the difference between a country's total exports and total imports?
Trade surplus
Trade deficit
Current account balance
Balance of trade
#5
Which of the following is a characteristic of globalization?
Decreased interconnectedness between countries
Reduced flow of goods, services, and capital across borders
Increased cultural exchange and integration
Isolation of national economies
#6
Which of the following best defines comparative advantage in international trade?
The ability of a country to produce a good at a lower opportunity cost than another country
The ability of a country to produce more goods than another country
The ability of a country to set lower tariffs than another country
The ability of a country to sell goods at a higher price than another country
#7
What is the role of the World Trade Organization (WTO) in global trade?
To promote free trade by reducing tariffs and other trade barriers
To regulate international finance
To provide aid to developing countries
To enforce international copyright laws
#8
What is the main purpose of a free trade agreement (FTA) between countries?
To increase tariffs on imported goods
To promote economic growth by reducing trade barriers
To restrict the movement of labor across borders
To regulate currency exchange rates
#9
Which of the following is NOT a factor that influences the decision to engage in international trade?
Market size and potential
Government policies and regulations
Distance between trading partners
Population density of trading countries
#10
What is the main purpose of a tariff in international trade?
To encourage imports of foreign goods
To decrease government revenue
To protect domestic industries from foreign competition
To promote free trade agreements
#11
What is the primary goal of foreign direct investment (FDI) for multinational corporations?
To increase a country's trade deficit
To reduce competition in the international market
To establish a presence in foreign markets and gain strategic advantages
To maintain strict control over domestic operations
#12
In which stage of the international product life cycle theory do products typically become standardized and mature?
Introduction stage
Growth stage
Maturity stage
Decline stage
#13
What is the main function of a letter of credit in international trade?
To facilitate direct payment between trading partners
To ensure that imported goods meet quality standards
To provide insurance against non-payment or delivery of goods
To guarantee payment to the exporter upon satisfactory completion of terms
#14
What is the primary purpose of a trade embargo?
To increase imports from a specific country
To promote diplomatic relations
To restrict or prohibit trade with a specific country
To encourage foreign investment
#15
What is the primary objective of a strategic alliance in international business?
To increase competition in the global market
To reduce market share
To gain access to new markets or technologies
To eliminate competitors