29 Questions
According to Raymond Vernon's Product Life-Cycle Theory, which stage involves the original country becoming a net importer of the product?
Standardization
What characterized the Introduction stage in Raymond Vernon's Product Life-Cycle Theory?
Monopoly in manufacturing and exports in inventor country
Why is Raymond Vernon's Product Life-Cycle Theory criticized for being ethnocentric?
It explained international trade from an American perspective.
How does the New Trade Theory differ from Raymond Vernon's Product Life-Cycle Theory?
It focuses on resource endowments and technology differences between nations.
What is a key characteristic of the Maturity stage in Raymond Vernon's Product Life-Cycle Theory?
Standardization of manufacturing processes
How does globalization impact the relevance of Raymond Vernon's Product Life-Cycle Theory today?
It renders the theory less valid due to simultaneous market introductions.
Which theory of international trade predicts that countries will export goods and services that make intensive use of factors of production that are locally abundant?
Heckscher-Ohlin theory
What is the term used to describe the ability of an individual, company, or country to produce a good or service at a lower cost than any competitor?
Absolute advantage
According to the Heckscher-Ohlin theory, what stage is characterized by the inventor country enjoying a monopoly in both manufacturing and exports of the product?
Introduction stage
What type of trade barriers exist?
Quotas and tariffs
What theory suggests that as products mature, the optimal product location will change?
New trade theory
What are free trade zones (FTZ) intended for?
Stimulating local economic development
What is the term used when tariffs are levied as a fixed charge for each unit of a good imported?
Specific tariffs
What does a quota demand in terms of goods production?
Specific fraction be produced domestically
What is the most common argument for imposing trade barriers?
Protecting domestic industries
What happens when governments do not restrict the exchange of goods and services between nations?
Free trade exists
What is the practice of selling goods in a foreign market below the cost of domestic production or below 'fair' market value called?
Dumping
Which of the following is a benefit of adopting the Euro as a common currency?
Reduction in currency exchange and hedging costs.
What is one of the main bodies of the EU according to the text?
The European Parliament
How many out of 27 countries have adopted the Euro?
20
What was one of the costs mentioned in adopting the Euro as a common currency?
Dissimilarities in economic activities within the eurozone.
What was a reason for European producers to reduce their production costs after adopting the Euro?
To maintain or increase profits.
What was a significant result of adopting the Euro for European producers?
Boost in the development of a pan-European capital market.
Which countries compose the USMCA?
United States, Canada, Mexico
Which group of countries have a common currency and common monetary and fiscal policies?
EU countries
True or False: South Korea is part of ASEAN.
False
Which of the following is an example of a customs union?
EU
What term describes the situation when high-cost producers are replaced by low-cost producers within a free trade area?
Trade diversion
What are the four primary activities involved in the value chain according to the text?
Research and development, Production, Marketing and sales, Service
Learn about Raymond Vernon's mid-1960s theory on the evolution of products through three stages: Introduction, Maturity, and Standardization. Explore how the manufacturing and export dynamics change across different countries during each stage.
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