Bellner BUSMHR 2000 Exam 2 (Final)
2026 Questions and Answers Graded A+
CH 5 - Correct answer-Theories of International Trade and Investment
National industrial policy - Correct answer-A proactive economic development
plan a government initiates to build or strengthen a particular industry.
Mercantilism - Correct answer-The belief that national prosperity is the result of a
positive balance of trade, achieved by maximizing exports and minimizing
imports.
Internalization theory - Correct answer-An explanation of the process by which
firms acquire and retain one or more value-chain activities inside the firm,
minimizing the disadvantages of dealing with external partners and allowing for
greater control over foreign operations.
Industrial cluster - Correct answer-A concentration of businesses, suppliers, and
supporting firms in the same industry at a particular location, characterized by a
critical mass of human talent, capital, or other factor endowments.
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, Free Trade - Correct answer-Relative absence of restrictions to the flow of goods
and services between nations.
Competitive advantage - Correct answer-Assets or capabilities of a firm that are
difficult for competitors to imitate. They are typically derived from specific
knowledge, competencies, skills, or superior strategies.
ex: knowledge, capabilities, skills, strategies, networks, assets
Comparative advantage principle - Correct answer-It may be beneficial for two
countries to trade with each other as long as one is relatively more efficient at
producing a product needed by the other.
Comparative advantage - Correct answer-Superior features of a country that
provide unique benefits in global competition, typically derived from either natural
endowments or deliberate national policies.
ex: resources, land, location, climate, labor (low cost & skilled)
Absolute advantage principle - Correct answer-The idea that a country benefits by
producing only those products it can produce using fewer resources.
National Classical Theories - Correct answer--Mercantilism
-Absolute Advantage Principle
-Comparative Advantage Principle
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2026 Questions and Answers Graded A+
CH 5 - Correct answer-Theories of International Trade and Investment
National industrial policy - Correct answer-A proactive economic development
plan a government initiates to build or strengthen a particular industry.
Mercantilism - Correct answer-The belief that national prosperity is the result of a
positive balance of trade, achieved by maximizing exports and minimizing
imports.
Internalization theory - Correct answer-An explanation of the process by which
firms acquire and retain one or more value-chain activities inside the firm,
minimizing the disadvantages of dealing with external partners and allowing for
greater control over foreign operations.
Industrial cluster - Correct answer-A concentration of businesses, suppliers, and
supporting firms in the same industry at a particular location, characterized by a
critical mass of human talent, capital, or other factor endowments.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
, Free Trade - Correct answer-Relative absence of restrictions to the flow of goods
and services between nations.
Competitive advantage - Correct answer-Assets or capabilities of a firm that are
difficult for competitors to imitate. They are typically derived from specific
knowledge, competencies, skills, or superior strategies.
ex: knowledge, capabilities, skills, strategies, networks, assets
Comparative advantage principle - Correct answer-It may be beneficial for two
countries to trade with each other as long as one is relatively more efficient at
producing a product needed by the other.
Comparative advantage - Correct answer-Superior features of a country that
provide unique benefits in global competition, typically derived from either natural
endowments or deliberate national policies.
ex: resources, land, location, climate, labor (low cost & skilled)
Absolute advantage principle - Correct answer-The idea that a country benefits by
producing only those products it can produce using fewer resources.
National Classical Theories - Correct answer--Mercantilism
-Absolute Advantage Principle
-Comparative Advantage Principle
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
