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Theories of International Trade
What do theories of international trade explain?
The way goods and services are exchanged across global boundaries.
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Theories of International Trade
What insight do trade theories provide regarding international products?
They explain the different products bought and sold internationally and the patterns of international trade.
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Expansion and Diversification through International Business
How can international business expand and diversify?
By earning high profits and receiving financial help from the government.
What was the role of gold and silver in trade according to Mercantilism?
They were mediums for the exchange of goods for about 2 centuries.
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Opportunity to Specialize in International Markets
What opportunities do international markets provide?
Avenues for new lines of service or products and specialization in different areas.
What is one way governments support exports according to Mercantilism?
By providing direct and indirect incentives.
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Limitations of Domestic Market
What demographic trends can limit domestic market growth?
Contraction in birth rate, decline in domestic demand, and fully tapped market potential.
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Theories of International Trade
What is the significance of the regulatory framework in international business?
It determines and defines a country's position in international business.
What is foreign investment?
Investment of funds abroad in exchange for financial return.
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Monopoly Power in International Business
What can lead to monopoly power in international business?
Patent rights, technological advantages, and product segregation.
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Theories of International Trade
What do trade theories help predict?
The size, content, and direction of trade flows.
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Growth Opportunities in Foreign Markets
Why are MNCs interested in developing countries?
Due to increasing income and population growth.
How did the Theory of Mercantilism view gold and silver?
As essential for the business of the country and the wealth of nations.
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Types of Foreign Investment
What are the two types of foreign investment?
Direct and portfolio investments.
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Theories of International Trade
What do international trade theories explain?
How the trade participating countries benefit from trade when engaged in trading goods and services.
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Growth Opportunities in Foreign Markets
Why do companies explore foreign markets?
Depression in the home market drives companies to seek growth opportunities abroad.
What does the Theory of Mercantilism focus on?
The export and import of gold and silver as the wealth of nations.
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Increased Revenues from International Business
What is one of the top advantages of international business?
Increased revenues from a larger number of potential clients.
When did the Theory of Mercantilism emerge?
In the mid-16th Century in England.
