Question 1

_________ refers to a situation where a government does not attempt to influence through quotas or duties what its citizens can buy from another country or what they can produce and sell to another country.

Accepted Answer

Free trade refers to a situation where there are no barriers or restrictions to trade between countries, and the government does not try to control or influence what its citizens can buy or sell from/to other countries. The goal of free trade is to promote economic growth, increase efficiency, and lower prices for consumers.

Question 2

In relation to the stage models of internationalisation,which of the following statements is incorrect?

Accepted Answer

The stage models are not limited in their ability to predict the internationalisation of small- to medium-sized firms. In fact, several stage models have been specifically developed for these types of firms, such as the Uppsala Model and the Born Global Model. However, some critics argue that the stage models do not capture the complexity and heterogeneity of the internationalisation process and may oversimplify the reality of firm internationalisation.

Question 3

The Uppsala model of internationalisation identified four different stages in entering an international market.Which of the following is NOT a stage identified in the Uppsala model?

Accepted Answer

The answer of The Uppsala model of internationalisation identified four...

Question 4

All of the following have important implications for international trade and international theory on business practice except:

Accepted Answer

While consumer confidence can certainly have an impact on international trade, it is not typically considered a key factor in international theory on business practice. The other options - first-mover advantage, government trade policy, and location - all play important and well-established roles in shaping international trade patterns and strategies.

Question 5

Which of the following has historically been noted as being an accurate explanation for international trade patterns?

Accepted Answer

The Product life-cycle theory explains international trade patterns by suggesting that products go through a cycle of introduction, growth, maturity, and decline, influencing where they are produced and exported.

Question 6

International new ventures (INVs)and 'born globals' internationalise rapidly due to reduced trade barriers and shorter product life cycles.These firms:

Accepted Answer

INVs and born globals do not follow an incremental sequential process to internationalisation. Instead, they internationalise rapidly due to reduced trade barriers and shorter product life cycles.

Question 7

The flaw with mercantilism was that it viewed trade as ____________.

Accepted Answer

Mercantilism viewed trade as a zero-sum game where one country could only gain at the expense of another country. This led to policies that focused on accumulating gold and silver through exports while restricting imports. However, this approach disregarded the benefits of mutually beneficial trade and ultimately hindered economic growth and development.

Question 8

Who initially proposed the product life-cycle theory in the mid-1960s?

Accepted Answer

Raymond Vernon proposed the product life-cycle theory in the mid-1960s.

Question 9

Which of the following choices correctly matches a scholar with the theory that he or she proposed?

Accepted Answer

Raymond Vernon is known for proposing the Product Life Cycle theory, which explains how products evolve over time and how this affects international trade.

Question 10

Considered to be the first theory of international trade,________ principal assertion was that gold and silver were the mainstays of national wealth and essential to vigorous commerce.

Accepted Answer

The theory described in the question is that of mercantilism, which held that a country's wealth could be measured by its stockpile of gold and silver, and that the goal of trade should be to accumulate these precious metals.

Quiz 2: Theories of Trade: Investment and Internationalisation