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Managerial Economics Quiz

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Managerial Economics Quiz
ch2
Student: ___________________________________________________________________________

1.

Record levels of American outward foreign direct investment from 2000 to 2009, totaling more than $2 trillion, caused U.S. exports to decline during this time period.
True False

2.

Small and medium-sized enterprises accounted for nearly one-third of all U.S. exporters.
True False

3.

International trade includes exports, imports, and foreign direct investment.
True False

4.

Importing and foreign direct investment are two approaches to meeting overseas demand.
True False

5.

International firms must export their products or services in order to establish and expand their overseas operations. True False

6.

The dollar value of total world exports
…show more content…
The first formulation of international trade theory, by Adam Smith, was motivated by political considerations. True False
19. The central idea of mercantilism is that there should be an export surplus so a nation can accumulate precious metals.
True False
20. Arguments in support of mercantilism largely disappeared after the end of the mercantilist era in the late
1700s.
True False
21. The theory of absolute advantage suggests that under free, unregulated trade, each nation should specialize in producing those goods it can produce most efficiently.
True False
22. Adam Smith explained how countries can benefit from international trade even if they lack any absolute advantage over their trade partners.
True False
23. According to the theory of comparative advantage, a nation can gain from trade if it is not equally less efficient in producing two goods.
True False
24. If a Chinese worker earns $1 a day, then goods produced by this worker will cost less than the same goods produced by an American earning $18 an hour.
True False
25. An arrangement in which one or more activities that could be provided in-house are instead provided by another company is offshoring.
True False
26. Some observers have argued that American industry and the American economy as a whole
…show more content…
AACSB: Reflective Thinking
Ball - Chapter 02 #8
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 02-01 Appreciate the magnitude of international trade and how it has grown.
Topic Area: International Trade

9.

The proportion of merchandise exports coming from Latin America and the Middle East decreased between 1980 and 2010.
TRUE
As stated directly in the text.
AACSB: Reflective Thinking
Ball - Chapter 02 #9
Blooms: Understand
Difficulty: 3 Hard
Learning Objective: 02-01 Appreciate the magnitude of international trade and how it has grown.
Topic Area: International Trade

10.

The level of merchandise exports coming from Africa decreased between 1980 and 2010.
FALSE
The level of merchandise exports from Africa grew by over 250 percent from 1980 to 2010, but the proportion of overall world merchandise exports coming from Africa declined by half.
AACSB: Reflective Thinking
Ball - Chapter 02 #10
Blooms: Understand
Difficulty: 2 Medium
Learning Objective: 02-01 Appreciate the magnitude of international trade and how it has grown.
Topic Area: International Trade

11.

The proportion of merchandise exports coming from Asia increased by over 90 percent between

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