WGU C211: Addit ional Study - 4th Attempt OA Quizzes [Questions and answers with complete solutions] A trade _____ is an economic condition in which a nation imports more than it exports. Correct Answer: deficit The _____ theory viewed international trade as a zero -sum game. Correct Answer: mercantilism Which of the following is a classical theory of international trade? Correct An swer: Comparative advantage theory The _____ theory is based on the assumption that the wealth of the world is fixed. Correct Answer: mercantilism Factor endowment is _____. Correct Answer: the extent to which different countries possess various factors of production Which of the following describes the maturing stage in the product life cycle theory? Correct Answer: The demand and ability to produce the product grow in developed nations. Which of the following is true of the strategic trade theory? Cor rect Answer: It provides direct policy advice. Import quotas are a type of _____. Correct Answer: nontariff barrier In the context of NTBs, _____ are bureaucratic rules that make it harder to import foreign goods. Correct Answer: administrative policies _____ are politically motivated trade sanctions against foreign countries to signal displeasure. Correct Answer: Trade embargoes Which of the following methods is directly derived from the theory of purchasing power parity (PPP)? Correct Answer: The Big Mac index Which of the following is true of quantitative easing? Correct Answer: It depreciates the currency that is being printed. A clean floating exchange rate policy is a government policy to _____. Correct Answer: allow a currency's value to fluctuate according to the foreign exchange rate _____ have specified upper or lower bounds within which the exchange rate is allowed to flu ctuate. Correct Answer: Target exchange rates The bandwagon effect is an example of the way _____ directly affects foreign exchange rates. Correct Answer: investor psychology The post -Bretton Woods system is a system of flexible exchange rate regimes wit h _____. Correct Answer: no official common denominator If the forward rate of the euro per dollar is higher than the spot rate, the euro has a _____. Correct Answer: forward discount The ____ is defined as the difference between the offer price and the bid price in a foreign exchange. Correct Answer: Spread Which of the following is an advantage of a weak US dollar? Correct Answer: Foreign tourists enjoy lower prices in the US _____ is the difference between two cultures along identifiable dimensions. Correct Answer: Cultural distance Which of the following is true of modes of entry? Correct Answer: Equity modes are indicative of relatively larger, harder -to-reverse commitments. Which of the following characterizes an MNE from a non -MNE? Correct Answe r: It enjoys OLI advantages. _____ are the most basic non -equity mode of entry, capitalizing on economies of scale in production concentrated in the home country and providing better control over distribution. Correct Answer: Direct exports Which of the following is a disadvantage of licensing and franchising? Correct Answer: Little control over marketing A disadvantage of acquisitions is _____. Correct Answer: High development costs In _____, clients pay contractors to design and construct new faciliti es and train personnel. Correct Answer: Turnkey Projects A greenfield operation refers to _____. Correct Answer: a wholly owned subsidiary created by building a new factory and offices from scratch In the LLL framework, _____ refers to an emerging MNE's ability to identify and bridge gaps in its market. Correct Answer: linkage
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