BUS357 Week 2 - Quiz

Question 1

1 / 1 pts

The major trade group in South America involving Brazil, Paraguay, Uruguay, and Argentina is ________.

APEC

CAN

Correct!

MERCOSUR

CAFTA-DR

 

Question 2

An example of an effective commodity agreement is ________.

the International Cotton Alliance

the International Tin Alliance

the Organization of Petroleum Importing Countries

Correct!

the Organization of Petroleum Exporting Countries

 

Question 3

NAFTA is a good example of ________.

the theory of trade implementation

the theory of trade disruption

Correct!

trade diversion

trade divestment

 

Question 4

The major trade group in South America is CAN.

Correct Answer

True

False

 

Question 5

1 / 1 pts

Tests to substantiate the factor proportions theory have had mixed results. One of the reasons is that ________.

large and small countries have different propensities to trade

Correct!

the theory assumes homogeneous factors of production, such as labor, but they are not

most countries try to have a favorable balance of trade

labor migration quickly outdates any studies

 

Question 6

1 / 1 pts

According to the PLC theory, developing countries have their best production advantage in which stage of the product life cycle?

introduction

Correct!

decline

maturity

growth

 

Question 7

1 / 1 pts

In Adam Smith’s theory of absolute advantage, he reasoned that specialization would allow countries to increase their efficiency for each of the following reasons EXCEPT ________.

long production runs would provide incentives for the development of more effective working methods

labor would not lose time in switching from the production of one kind of product to another

Correct!

transportation costs could be lowered by producing closer to markets

labor could become more skilled by repeating the same tasks

 

Question 8

1 / 1 pts

An NGO is a private institution independent from the government.

Correct!

True

False

 

Question 9

1 / 1 pts

The argument for import protection in developing countries to bring about industrialization differs from the infant-industry argument in that ________.

Correct!

it presumes there will be economic gains even if output does not become internationally competitive

the emphasis is on using locally available raw materials

the emphasis is on labor-intensive production

the success of such a policy is judged on the ability to become more independent of other countries

 

Question 10

1 / 1 pts

Compared to the European Union, the North American Free Trade Agreement ________.

Correct!

is larger in total GNI

is larger in population and total GNI

has more trade problems since it is a customs union in addition to being a free trade agreement

has a stronger currency linkage due to the U.S. dollar