How do countries economies gain from international trade

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Reference no: EM132132955

1. How do countries' economies gain from international trade?

a. Citizens should buy only those products that are produced domestically.

b. Since it is of interest to domestic producers, countries benefit from international trade.

c. Countries can import products that can be produced more efficiently in other countries.

d. Country can specialize in the manufacturing of products that are produced most efficiently in other countries.

2. Why has FDI grown more rapidly than world trade?

a. Decline in trade barriers has made the fear of protectionist pressures redundant.

b. Programs such as privatization have made developing nations attractive for MNEs.

c. The general shift toward radical and totalitarian political institutions.

d. Executives see trade as a way of circumventing future trade barriers.

3. Why would a firm prefer to acquire an existing asset instead of executing a greenfield investment?

a. Many mergers and acquisitions fail to realize anticipated efficiency gains.

b. Firms believe that they need to acquire the desirable target firm before the rivals.

c. Greenfield investments are faster to execute.

d. It is easier to build assets from ground up.

Reference no: EM132132955

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