Questions and Answers
The Uruguay Round, finalized in December 1993, reduced protection for patents, trademarks, and copyrights.
False
"Beggar thy neighbor" retaliatory trade policies involved countries progressively lowering trade barriers against each other, which contributed to the Great Depression of the 1930s.
False
Rivers Inc., a U.S.-based sports apparel manufacturer, sets up a production unit in China to take advantage of the lower labor costs there. This is an example of foreign direct investment.
True
World Bank gives aid of $100 million to Kenya for creating rural health care facilities. This is an example of foreign direct investment.
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The lowering of barriers to international trade enables firms to view the world, rather than a single country, as their market.
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According to WTO data, the volume of world merchandise trade has grown faster than the world economy since 1950.
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The cost of microprocessors continues to fall, while their power increases. This statement supports the predictions made by Moore's Law.
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The Uruguay Round provided reduced protection for patents, trademarks, and copyrights.
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Which of the following is a factor of production?
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Which of the following focuses on making low-interest loans to cash-strapped governments in poor nations that wish to undertake significant infrastructure investments?
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Which of the following was established to maintain order in the international monetary system?
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Which of the following is true of the IMF?
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The volume of world trade in merchandise is growing faster than world GDP. This implies that:
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________ occurs when a firm exports goods or services to consumers in another country.
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________ predicts that the power of microprocessor technology doubles and its cost of production falls in half every 18 months.
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Containerization allows:
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The average tariff rates for manufactured goods have fallen significantly since 1950, and now stand at about:
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The volume of world trade in merchandised goods has been:
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The growth of international trade in service activities has been driven by advances in:
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ABC Global has decided to invest resources in business activities outside its home country. This is called:
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Study Notes
International Trade Concepts
- Uruguay Round: Completed in December 1993, this trade round did not reduce protection for patents, trademarks, and copyrights.
- "Beggar thy neighbor" policies: These policies resulted in countries raising trade barriers against each other, contributing to the Great Depression of the 1930s.
- Foreign Direct Investment (FDI): Setting up production units in lower-cost countries, such as Rivers Inc. establishing in China, exemplifies FDI.
- International Trade Benefits: Lowering international trade barriers permits firms to view global markets, rather than only domestic ones.
Economic Data and Trends
- Global Merchandise Trade: Since 1950, world merchandise trade volume has been growing faster than the world economy (GDP).
- Microprocessor Advancements: The decline in microprocessor costs alongside increased power supports Moore's Law, which predicts technology improvements every 18 months.
International Organizations and Functions
- World Bank Support: Provides significant aid, evidenced by $100 million for rural healthcare in Kenya, but does not constitute FDI.
- World Bank Role: Focuses on providing low-interest loans for infrastructure investments in developing nations.
- International Monetary Fund (IMF): Established to maintain order in the international monetary system and is often a primary lender to economically troubled countries.
Trade and Investment Definitions
- Merchandise Trade Growth: World trade in merchandise is indicative of increasingly dispersed global production processes and growing interdependence among nations.
- International Trade: Defined as exporting goods or services to consumers in other countries.
- Containerization: Simplifies transshipment between different transport modes, enhancing logistical efficiency globally.
Tariffs and Trade Rates
- Average Tariff Rates: Significant decline since 1950; current rates for manufactured goods are about 1.6%.
- Service Trade Growth: Driven primarily by advances in communications technology.
Key Predictions and Theories
- Moore's Law: Predicts that microprocessor performance doubles while production costs halved every 18 months, driving technological advancement.
Business Investment Strategy
- ABC Global's Investment: Indicates a strategic move characterized as foreign direct investment (FDI) when resources are allocated to business activities outside the home country.
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Test your knowledge on key concepts in international business with this engaging quiz. From trade policies to historical impacts, the questions will challenge your understanding of the subject. Perfect for students and professionals alike!
