Commerce 4SA3 Midterm Exam
Questions and Answers 100%
Pass
Why Globalization? - CORRECT ANSWER-- international trade
-> country-specific comparative advantage, higher production efficiency,
increased output
- FDI (from developed countries)
-> lower costs, greater market size, higher profits
- FDI (from developing countries)
-> advanced technology and management, higher production efficiency, higher
profits
Drivers of Globalization - CORRECT ANSWER-1. Declining trade and
investment barriers
, 2. Technological change
Mercantilism - CORRECT ANSWER-countries should try to increase their
exports while reducing their imports
no trade surplus in long run
view trade as zero-sum game
Trade surplus - CORRECT ANSWER-when a country exports more than it
imports
Trade deficit - CORRECT ANSWER-An excess of imports over exports
Factors Proportions Theory - CORRECT ANSWER-Countries will export goods
that make intensive use of those factors that are locally abundant, while importing
goods that make intensive use of factors that are locally scarce
Where does the initial set of endowments come from? (from factors proportions
theory/comparative advantage) - CORRECT ANSWER-- geography
- stage of development
- historic legacy
New Trade Theory - CORRECT ANSWER-Comparative advantage may not be
the result of initial factor endowments
COPYRIGHT ALL RIGHTS RESERVED ©️ 2025
Questions and Answers 100%
Pass
Why Globalization? - CORRECT ANSWER-- international trade
-> country-specific comparative advantage, higher production efficiency,
increased output
- FDI (from developed countries)
-> lower costs, greater market size, higher profits
- FDI (from developing countries)
-> advanced technology and management, higher production efficiency, higher
profits
Drivers of Globalization - CORRECT ANSWER-1. Declining trade and
investment barriers
, 2. Technological change
Mercantilism - CORRECT ANSWER-countries should try to increase their
exports while reducing their imports
no trade surplus in long run
view trade as zero-sum game
Trade surplus - CORRECT ANSWER-when a country exports more than it
imports
Trade deficit - CORRECT ANSWER-An excess of imports over exports
Factors Proportions Theory - CORRECT ANSWER-Countries will export goods
that make intensive use of those factors that are locally abundant, while importing
goods that make intensive use of factors that are locally scarce
Where does the initial set of endowments come from? (from factors proportions
theory/comparative advantage) - CORRECT ANSWER-- geography
- stage of development
- historic legacy
New Trade Theory - CORRECT ANSWER-Comparative advantage may not be
the result of initial factor endowments
COPYRIGHT ALL RIGHTS RESERVED ©️ 2025
