DOWNLOAD THE Test Bank for International Business Competing and
Cooperating in Global World 1st Edition Geringer
Module 02 International Trade and Investment
True / False Questions
1. Record levels of American outward foreign direct investment from 2010 to 2013, totaling more
than $1.4 trillion, caused U.S. exports to decline during this time period.
True False
2. International trade includes exports, imports, and foreign direct investment.
True False
3. Nearly 60 percent of global output is now destined for international trade.
True False
4. The proportion of world trade coming from Latin America, Africa, and the Middle East has
decreased since 1980.
True False
5. All regions of the world experienced an absolute increase in the dollar volume of their services
exports since 1980, although the U.S. proportion has risen by approximately one-third since that
time.
True False
6. In 2013, the top 10 exporting and importing nations collectively accounted for over half of all
exports and imports of merchandise and services worldwide.
True False
2-1
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,DOWNLOAD THE Test Bank for International Business Competing and
Cooperating in Global World 1st Edition Geringer
7. Approximately two-thirds of the exports from developed countries go to developed countries.
True False
8. The development of expanded regional trade agreements, such as the Association of Southeast
Asian Nations, Mercosur, and the EU, can substantially alter the level and proportion of trade flows
within and across regions.
True False
9. There are a number of advantages in focusing attention on a nation that is already a sizable
purchaser of goods coming from the would-be exporter's country.
True False
10. The first formulation of international trade theory, by Adam Smith, was motivated by political
considerations.
True False
11. The central idea of mercantilism is there should be an export surplus so a nation can accumulate
precious metals.
True False
12. The theory of absolute advantage suggests that under free, unregulated trade, each nation should
specialize in producing those goods it can produce most efficiently, based on naturally occurring
endowments such as minerals.
True False
13. 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
2-2
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,DOWNLOAD THE Test Bank for International Business Competing and
Cooperating in Global World 1st Edition Geringer
14. If a Chinese worker earns $1.00 a day, then goods produced by this worker will cost less than the
same goods produced by an American earning $18.00 an hour.
True False
15. Currency devaluation helps a nation avoid losing markets and regain competitiveness in world
markets.
True False
16. A theory developed by Eli Heckscher and Bertil Ohlin at the Stockholm School of Economics
suggests that differences in resource endowments will make developed countries more likely to
trade with developed countries whose resource endowments are likely to be very similar, than with
developing countries whose endowments are dissimilar.
True False
17. According to the text, differences in taste, a demand variable, can reverse the direction of trade
predicted by the theory.
True False
18. The international product life-cycle theory may have its greatest usefulness in explaining trade and
investment behavior when international firms introduce their new products in home markets first.
True False
19. The predictable decline in the average cost of producing each unit of output as a production
facility gets larger and output increases is known as the experience curve.
True False
20. Michael Porter claims that demand conditions, factor conditions, related and supporting industries,
and firm strategy, structure, and rivalry, rather than government and chance, are factors that affect
national competitiveness.
True False
2-3
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McGraw-Hill Education.
mynursytest.store
, DOWNLOAD THE Test Bank for International Business Competing and
Cooperating in Global World 1st Edition Geringer
21. Importing and foreign direct investment are two approaches to meeting overseas demand.
True False
22. Portfolio investment is the purchase of sufficient stock in a firm to obtain significant management
control.
True False
23. The proportion of the outstanding stock of foreign direct investment accounted for by the United
States declined by two-thirds over the past 20 years.
True False
24. The overall volume of outward FDI from developing nations in 2013 was four times the level in
2003.
True False
25. The vast proportion of outward FDI, about two-thirds, originates from the developed countries.
True False
26. Worldwide, the volume of FDI flowing into the developing countries as a whole was seven times
larger in 2000 than in 1990 and had nearly tripled again by 2013.
True False
27. Foreign direct investment may be an attempt by foreign companies to establish competitive
advantage over potential competitors in other markets, due to possession of advantages not
available to local firms. Such advantages possessed by foreign companies over their local
competitors include knowledge about local market conditions and cost efficiencies from operating
at a distance.
True False
2-4
Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
mynursytest.store
Cooperating in Global World 1st Edition Geringer
Module 02 International Trade and Investment
True / False Questions
1. Record levels of American outward foreign direct investment from 2010 to 2013, totaling more
than $1.4 trillion, caused U.S. exports to decline during this time period.
True False
2. International trade includes exports, imports, and foreign direct investment.
True False
3. Nearly 60 percent of global output is now destined for international trade.
True False
4. The proportion of world trade coming from Latin America, Africa, and the Middle East has
decreased since 1980.
True False
5. All regions of the world experienced an absolute increase in the dollar volume of their services
exports since 1980, although the U.S. proportion has risen by approximately one-third since that
time.
True False
6. In 2013, the top 10 exporting and importing nations collectively accounted for over half of all
exports and imports of merchandise and services worldwide.
True False
2-1
Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
mynursytest.store
,DOWNLOAD THE Test Bank for International Business Competing and
Cooperating in Global World 1st Edition Geringer
7. Approximately two-thirds of the exports from developed countries go to developed countries.
True False
8. The development of expanded regional trade agreements, such as the Association of Southeast
Asian Nations, Mercosur, and the EU, can substantially alter the level and proportion of trade flows
within and across regions.
True False
9. There are a number of advantages in focusing attention on a nation that is already a sizable
purchaser of goods coming from the would-be exporter's country.
True False
10. The first formulation of international trade theory, by Adam Smith, was motivated by political
considerations.
True False
11. The central idea of mercantilism is there should be an export surplus so a nation can accumulate
precious metals.
True False
12. The theory of absolute advantage suggests that under free, unregulated trade, each nation should
specialize in producing those goods it can produce most efficiently, based on naturally occurring
endowments such as minerals.
True False
13. 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
2-2
Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
mynursytest.store
,DOWNLOAD THE Test Bank for International Business Competing and
Cooperating in Global World 1st Edition Geringer
14. If a Chinese worker earns $1.00 a day, then goods produced by this worker will cost less than the
same goods produced by an American earning $18.00 an hour.
True False
15. Currency devaluation helps a nation avoid losing markets and regain competitiveness in world
markets.
True False
16. A theory developed by Eli Heckscher and Bertil Ohlin at the Stockholm School of Economics
suggests that differences in resource endowments will make developed countries more likely to
trade with developed countries whose resource endowments are likely to be very similar, than with
developing countries whose endowments are dissimilar.
True False
17. According to the text, differences in taste, a demand variable, can reverse the direction of trade
predicted by the theory.
True False
18. The international product life-cycle theory may have its greatest usefulness in explaining trade and
investment behavior when international firms introduce their new products in home markets first.
True False
19. The predictable decline in the average cost of producing each unit of output as a production
facility gets larger and output increases is known as the experience curve.
True False
20. Michael Porter claims that demand conditions, factor conditions, related and supporting industries,
and firm strategy, structure, and rivalry, rather than government and chance, are factors that affect
national competitiveness.
True False
2-3
Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
mynursytest.store
, DOWNLOAD THE Test Bank for International Business Competing and
Cooperating in Global World 1st Edition Geringer
21. Importing and foreign direct investment are two approaches to meeting overseas demand.
True False
22. Portfolio investment is the purchase of sufficient stock in a firm to obtain significant management
control.
True False
23. The proportion of the outstanding stock of foreign direct investment accounted for by the United
States declined by two-thirds over the past 20 years.
True False
24. The overall volume of outward FDI from developing nations in 2013 was four times the level in
2003.
True False
25. The vast proportion of outward FDI, about two-thirds, originates from the developed countries.
True False
26. Worldwide, the volume of FDI flowing into the developing countries as a whole was seven times
larger in 2000 than in 1990 and had nearly tripled again by 2013.
True False
27. Foreign direct investment may be an attempt by foreign companies to establish competitive
advantage over potential competitors in other markets, due to possession of advantages not
available to local firms. Such advantages possessed by foreign companies over their local
competitors include knowledge about local market conditions and cost efficiencies from operating
at a distance.
True False
2-4
Copyright © 2016 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
McGraw-Hill Education.
mynursytest.store
