10 Questions
What is the basis for the Principle of Comparative Advantage in international trade?
Exporting products with the least comparative disadvantage
In international trade, a country should export a product if it...
Has the greatest comparative disadvantage in that product
What should a country do in international trade if it has the least comparative advantage in a particular product?
Import that product
Which situation would go against the Principle of Comparative Advantage in international trade?
A country importing products with the greatest absolute advantage
Considering the Principle of Comparative Advantage, what should a country do if it faces challenges producing a certain product?
Shift focus to importing that product
Which type of foreign direct investment involves building a completely new business through a business plan developed by the parent company?
Greenfield
What does assembly involve in the context of manufacturing?
Constructing a finished product from components
In FDI strategies, what does manufacturing encompass?
Producing from raw materials to a finished product
Which type of international acquisition involves acquiring a company that is already in existence?
Acquisition
What distinguishes acquisition from greenfield investment in terms of FDI strategies?
The involvement of parent company's business plan
Test your knowledge on the principle of comparative advantage in international trade, which dictates that a country should export products with the greatest comparative advantage or import products for which it has the least comparative advantage.
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