Chapter 2 - Chapter 2 Motives for World Trade and Foreign...

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Chapter 2 Motives for World Trade and Foreign Investment 1. According to the classical economic theory, international trade takes place between countries based on the . A. absolute advantage of land B. absolute advantage of labor C. absolute advantage of technology D. comparative advantage of skills * E. comparative advantage of cost 2. According to the theory of factor endowments, a country must specialize in the production and export of any good that uses its large amount of production factors. A. scarce B. limited C. wasteful * D. abundant E. small 3. A product life cycle theory works only . A. in international trade B. in international investment * C. in both international trade and foreign investment D. with an exporter who has a monopolistic position E. with an importer who has a comparative advantage 4. Which of the following is not a major form of trade restriction? * A. forfaiting B. tariffs C. non-tariff barriers D. import quotas E. countervailing duties 5. The main functions of the World Trade Organization (WTO) do not include . A. administrating its trade agreements B. forum for trade negotiations C. technical assistance and training for developing countries D. monitoring national trade policies * E. the establishment of trade centers around the world
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6. The major forms of economic cooperation among countries do not include . A.
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This note was uploaded on 02/16/2012 for the course FIN 7023 taught by Professor Wald during the Spring '12 term at The University of Texas at San Antonio- San Antonio.

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Chapter 2 - Chapter 2 Motives for World Trade and Foreign...

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