STUDY MC

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Trinity Western University *

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Economics

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Jan 9, 2024

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Suppose Petro Canada, an international oil company, had a complaint about a trade issue. The __________, a governing body established at the Uruguay Round in 1993 to police the international trading system, is an organization that Petro Canada could take its complaint to. World Trade Organization The Web is viewed as a global what? equalizer The agency established at the 1993 Uruguay Round to police the international trading system is the __________. World Trade Organization Under the umbrella of GATT there have been eight rounds of negotiations among member states. The _______ was the most recent round of negotiations. Uruguay Round Since the 1960s, there have been two notable trends in the demographics of the multinational enterprise. These two trends have been: the rise of non-U.S. multinationals and the growth of mini-multinationals What is the primary purpose of the World Trade Organization? arbitrate of trade disputes The relative decline of the developed countries' share of world output _________________. reflects the growing economic and industrial strength of developing countries. After World War II, the West committed to removing trade barriers between nations because of what experience? retaliatory trade policies leading to the Depression The International Monetary Fund (IMF) is often seen as the leader of last resort to nation states whose economies are in economic turmoil. True The International Monetary Fund and the World Bank were both created in 1944 by 44 nations that met at Bretton Woods, New Hampshire. True What country's share of world output went from almost nothing in 1960 to 10.8% in 2012? China The __________ is a treaty designed to remove barriers to the free flow of goods, services, and capital between nations. General Agreement on Tariffs and Trade Outsourcing has even extended to the Canadian _______ industry. services Free trade agreements can be tied to tougher environmental and labour laws. True The _______ was created in 1944 by 44 nations that met in Bretton Woods, New Hampshire. International Monetary Fund Which of the following is an example of a developing nation? Thailand Among developing nations, the largest recipient of foreign direct investment has been which country? China Supranational organizations such as the WTO are criticized for focusing on economics and not on democracy and environmental responsibility.

What was created at the same time as the International Monetary Fund? World Bank The _______ is seen as the lender of last resort to nation-states whose economies are in turmoil and currencies are losing value against those of other nations. International Monetary Fund Most forecasts now predict a rapid rise in world output accounted for by developing nations such as China, India, and South Korea, and a rapid decline in the share enjoyed by rich industrialized countries such as Canada, Britain and the United States. True According the lecture, the number of Internet users in Canada has surpassed? 90% Many social democratic governments nationalize private companies. True The violation of _______________ can be violated in two ways—through private action and through public action. property rights Amartya Sen believed that development should be assessed less by measures such as _______________. GNP Without a ____ the incentive to engage in economic activity can be reduced substantially by private and public entities. Legal system Political systems can be assessed according to two related dimensions: the degree to which they emphasize collectivism opposed to individualism and the degree to which they are democratic or totalitarian __________ liability involves holding a firm and its officers responsible when a product causes injury, death, or damage. Product Amartya Sen believed that development should be assessed more by measures such as _______________. HDI What kind of economies were once very common throughout much of the world, although they are becoming less so? mixed The bundle of legal rights over the use to which a resource is put; and over the use made of any income that may be derived form that resource are called __________ rights. property Which of the following can be traced to an ancient Greek philosopher, Aristotle? individualism An example of an institutional weakness that undermines contract enforcement is what? Court capacity GATT was, by most measures, ___________ in its early years. very successful One of the most famous examples of a(n) __________ is the limitation on auto exports to the United States enforced by Japanese automobile producers in 1981. voluntary export restraint The intellectual case for free trade goes back to the late 18th century and the work of Adam Smith and David Ricardo.

True The ____________ was a multilateral agreement whose objective was to liberalize trade by eliminating tariffs, subsidies, import quotas, and the like. General Agreement of Tariffs and Trade A government should use subsidies to support promising firms that are active in newly emerging industries, according to the ______ argument. strategic trade policy The strategic trade policy argument of the new trade theorists advances an _______ justification for government intervention in international trade. economic ________ arguments challenges the rationale for unrestricted free trade found in the work of classic trade theorists such as Adam Smith and David Ricardo. Strategic trade policy Local content regulations have been widely used by __________ to shift their manufacturing base from the simple assembly of products whose parts are manufactured elsewhere into the local manufacture of component parts. developing nations __________ is not one of the main reasons that protectionist pressures arose around the world during the 1980s. The opening of Japanese markets to imports The __________ was created to arbitrate trade disputes and monitor the trade policies of member countries as a result of the Uruguay Round agreement. World Trade Organization Some would argue that ___________ are the masters of administrative trade policies. Japan According to the textbook, Paul Krugman, a professor at MIT, predicts that a country that attempts to use strategic trade policy to establish a domestic firm (or firms) in a dominant position in a global industry will probably: Provoke retaliation. Antidumping duties are often called _____________. countervailing duties According to _______, subsidies can help a firm achieve a first-mover advantage in an emerging industry. strategic trade policy An important component of _____ is that it might pay governments to intervene in an industry if it helps domestic firms overcome the barriers to entry created by foreign firms that have already reaped first-mover advantages. strategic trade policy GATT rules had applied only to manufactured goods and commodities until the Uruguay Round. True The ________ oblige(s) member states to make the bribery of foreign public officials a criminal offence. Convention on Combating Bribery of Foreign Public Officials in International Business Transactions In Rawls' philosophy, the principle that each person be permitted the maximum amount of basic liberty compatible with a similar liberty for others is known as the ____ principle. first Of the following, which assist organizations to think through the ethical implications of decision in a systematic way? Rights theories and Rawls' theory of justice.

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_________ approaches to business ethics are raised by business ethics scholars primarily to demonstrate that they offer inappropriate guidelines for ethical decision-making in a multinational enterprise. Straw men In ____________, member states of the OECD adopted the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. 1997 In Rawls' philosophy, the _________ indicates that inequalities are justified if they benefit the position of the least- advantaged members of society. difference principle In order for the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions to be truly effective, what must happen? the convention must be translated into laws by each signatory nation All of the following would be considered to be that which individuals are ignorant of under John Rawls' veil of ignorance EXCEPT ________. political affiliation Stakeholder analysis involves a certain amount of what has been called ______. moral imagination An example of a "straw man" argument is the Friedman Doctrine. True What does Article 29 of the Universal Declaration of Human Rights convey? Everyone has duties to the community. Of the following, which assist organizations to think through the ethical implications of decision in a systematic way? impartiality Philosopher _________ argued that all economic goods and services should be distributed equally except when an unequal distribution would work to everyone's advantage. John Rawls __________, the first theory of international trade, principal assertion was that gold and silver were the mainstays of national wealth and essential to vigorous commerce. Mercantilism's Which theory stresses that in some cases countries specialize in the production and export of particular products not because of underlying differences in factor endowments but because in certain industries the world market can support only a limited number of firms? New trade to Porter, the four broad attributes of a nation that shape the environment in which local firms compete and that promote or impede the creation of competitive advantage are demand conditions, firm strategy, structure, and rivalry, factor endowments, and relating and supporting industries. True In his study dealing with the competitive advantage of nations, Porter argued that in regard to demand conditions, a nation's firms' gain competitive advantage if their domestic consumers are __________ and __________. sophisticated; demanding The conditions governing how companies are created, organized, and managed and the nature of domestic rivalry is referred to as: firm strategy, structure, and rivalry. The main tenet of mercantilism was that it was in a country's best interest to maintain a(n) : export trade surplus

The theory of comparative advantage, advanced by __________, is the intellectual basis of the modern argument for unrestricted free trade. David Ricardo Which of the following two theories justify some limited and selective government intervention to support the development of certain export-oriented industries? The new trade theory and theory of national competitive advantage. We would expect Porter's model to predict _______, if he is correct. the pattern of international trade The theory of __________, developed by Michael Porter, focuses on the importance of country factors such as domestic demand and domestic rivalry in explaining a nation's dominance in the production and export of particular products. national competitive advantage Who argued that successful industries within a country tend to be grouped into "clusters" of related industries? Porter Which theory of international trade directly explains why there are only two to three producers of airlines in the world today? new trade The __________ theory argues that due to the presence of substantial scale economies, world demand will support only a few firms in many industries. new trade In 1990, who published the results of an intensive research effort that attempted to determine why some nations succeed and others fail in international competition? Michael Porter Which of the following statements accurately characterizes mercantilism? It still influences many governments. Dynamic gains in both the stock of a country's resources and the efficiency with which resources are utilized will cause a country's PPF to: shift outward. Because of substantial economies of scale, the __________ theory argues that in many industries there are increasing returns to specialization. new trade One of the limitations to the theory of comparative advantage is that it assumes: constant returns to scale. Economies of scale increases the efficiency of resource utilization, therefore increasing what? productivity For the most part Canadian FDI outflow in last few years went to ________________. Canadian affiliates and subsidiaries Which is a possible adverse effect of FDI on a host country's balance-of-payments position? Set against the initial capital inflow that comes with FDI must be the subsequent outflow of income as the foreign subsidiary repatriates earnings to its parent company. Three main costs of inward FDI concern host countries. These are: The possible adverse effects of FDI on competition within the host country, adverse effects on the balance of payments, and the perceived loss of national sovereignty and autonomy.

If a Canadian corporation decides to create FDI in Mexico because the new plant site has lower costs, this can cause Canada to: deteriorate its trade position. In a ________________ view, FDI should be allowed only if the benefits outweigh the costs. pragmatic nationalism International trade theory tells us that home country concerns about the negative economic effects of offshore production: may be misplaced. Dunning argues that combining location specific assets or resource endowments and the firm's own unique capabilities often requires: FDI. ________________ are three main benefits of inward FDI for a host country. The resource-transfer effect, the employment effect, and the balance-of-payments effect What is the record of a country's export and import of goods and services referred to as? Current account _______________ has not contributed to the increase in FDI over the past several years. Dramatic shifts towards socialist and communist political institutions Which of the following is NOT a reason that the radical position of MNEs was in retreat by the end of the 1980s? The rise of democracy in the Western countries. Host governments use a range of controls to restrict FDI. The two most common are: ownership restraints and performance requirements. _______________, a branch of economics, seeks to explain why firms often prefer foreign direct investment to licensing as a strategy for entering foreign markets. Internalization theory The members of the Organization for Economic Cooperation and Development include: most European countries, the United States, Canada, Japan, and South Korea. Which of the following two statements accurately reflects the trend in foreign direct investments over the past 35 years? There has been a rapid increase in the total volume of FDI undertaken and there has been a change in the importance of various countries as sources for FDI. A country's _______________ tracks both its payments to and its receipts from other countries. balance-of-payments account A Paris-based intergovernmental organization of "wealthy" nations whose purpose is to provide its 34 member states with a forum in which governments can compare their experiences, discuss the problems they share, and seek solutions that can be applied within their own national contexts is referred to as: Organization for Economic Cooperation and Development. Regarding the costs of FDI for the home country, the most important concerns center around: the balance-of-payments and employment effects of outward FDI. Monetary discipline was a central objective of Bretton Woods, and a rigid policy of fixed exchange rates was ___ seen as too inflexible. What do many Canadian businesspeople NOT buy into with respect to the value of the Canadian dollar? A stronger dollar will reduce demand for Canada's exports.

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A government restricts the convertibility of its currency to protect the country's _____________ and to halt any capital flight. foreign exchange reserves Under a floating exchange rate regime, market forces have produced what? A volatile U.S. dollar exchange rate. The foreign exchange market serves two main functions. These are what? Convert the currency of one country into the currency of another and provide some insurance against foreign exchange risk. The law of one price and purchasing power parity are two components of: price and exchange rates. Fixed exchange rates are seen as a mechanism for achieving the following two objectives: controlling inflation and economic discipline. The ______________ exchange rate regime that followed the collapse of the fixed exchange rate system was formalized in January 1976 when IMF members met in Jamaica and agreed to the rules for the international system that are in place today. floating The case for floating exchange rates has two main elements. These are: monetary policy autonomy and automatic trade balance adjustments. ______________ determines whether the rate of growth in a country's money supply is greater than the rate of growth in output. Government policy ______________ is most likely to occur when the value of the domestic currency is depreciating rapidly because of hyperinflation. Capital flight Institutional arrangements that countries adopt to govern exchange rates refers to what? International monetary system A _______________ eliminates trade barriers between member countries and adopts a common external trade policy. customs union In 1990, the MERCOSUR pact was expanded to include: Paraguay and Uruguay. The most recent countries to become a members of ASEAN are: Vietnam, Laos, and Myanmar The original forerunner of the EU, the __________ was formed in 1951 by Belgium, France, West Germany, Italy, Luxembourg, and the Netherlands. European Coal and Steel Community Which of the following selections accurately depicts the levels of economic integration from least integrated to most integrated? Free trade area, customs union, common market, economic union, and full political union Establishment of a _______________ trade policy necessitates significant administrative machinery to oversee trade relations with non-members. common external In theory, _______________ rules should ensure that a free trade agreement does not result in trade diversion. World Trade Organization

STUDY MC

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