Homework answers / question archive / The University of Newcastle IBUS 2003 Week 1 1)the first treaty that proposed the reduction of custom and import duties, a single market of goods and services and common trade policies across jurisdiction in Belgium, France, Italy and Luxembourg is known as:   Treaty of Rome (1957)       GATT’s Kennedy Round Treaty (1964- 1967)       Tokyo Round Treaty (1973-1979)       Uruguay Round Treaty (1986-1994)       2

The University of Newcastle IBUS 2003 Week 1 1)the first treaty that proposed the reduction of custom and import duties, a single market of goods and services and common trade policies across jurisdiction in Belgium, France, Italy and Luxembourg is known as:   Treaty of Rome (1957)       GATT’s Kennedy Round Treaty (1964- 1967)       Tokyo Round Treaty (1973-1979)       Uruguay Round Treaty (1986-1994)       2

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The University of Newcastle

IBUS 2003

Week 1

1)the first treaty that proposed the reduction of custom and import duties, a single market of goods and services and common trade policies across jurisdiction in Belgium, France, Italy and Luxembourg is known as:

 

Treaty of Rome (1957)

 

 

 

GATT’s Kennedy Round Treaty (1964- 1967)

 

 

 

Tokyo Round Treaty (1973-1979)

 

 

 

Uruguay Round Treaty (1986-1994)

 

 

 

2.            A country will enjoy a comparative advantage over other countries if it naturally entails a greater abundance of means of economic production. This is referring to:

 

David Ricardo’s Theory of Comparative Advantage

 

 

 

Eli Hecksher and Bertil Ohlin’s Factor Endowment Theory

 

 

 

Adam Smith’s Theory of Absolute Advantage

 

 

 

Michael Porter’s Cluster Theory

 

 

 

3.            Which of the following is a fair ranking of the major importing countries respectively:

 

Spain, Belgium, Rest of the world

 

United States, China, Germany

 

Hongkong, Australia, Mexico

 

Rest of the World, USA, Netherlands

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4.            A trade theory which states that concentrating industries in specific regions creates several advantages is known as:

 

 

 

David Ricardo’s Theory of Comparative Advantage

 

Eli Hecksher and Bertil Ohlin’s Factor Endowment Theory

 

 

 

Adam Smith’s Theory of Absolute Advantage

 

 

 

Michael Porter’s Cluster Theory

 

 

 

5.            What theory explains how countries can gain from trade by specializing in producing and exporting the goods that they can produce more efficiently than other countries?

 

 

 

David Ricardo’s Theory of Comparative Advantage

 

Eli Hecksher and Bertil Ohlin’s Factor Endowment Theory

 

 

 

Adam Smith’s Theory of Absolute Advantage

 

 

 

Michael Porter’s Cluster Theory

 

6.            Regarding international trade milestones, what did the Bretton-Woods Conferences of 1944 present?

 

 

 

Established a new monetary system by introducing the USD as the global currency.

 

 

 

Reinforced the notion that the gold currency is the international backing in monetary systems.

 

 

 

Introduced the first general agreement on tariffs and trade.

 

 

 

Proposed the creation of the international monetary fund.

 

 

 

 

 

 

 

 

 

 

 

7.            Over its life, a product will be manufactured in different countries, at different stages, hence generating trade between these countries. What stage of a product life cycle explains the point when sales grow, and competitors start to make similar products in other developed countries, responding to local needs.

 

 

 

Stage 1

 

 

 

Stage 2

 

 

 

Stage 3

 

 

 

Stage 4

 

 

8.            When companies increase their sales worldwide to recover their high investment costs, this is known as a:

 

Cost driver

 

 

 

Competition driver

 

 

 

Market driver

 

 

 

Technology driver

 

 

 

9.            A trade theory that summates the costs and benefits in terms of other goods given up (opportunity cost) if the same good in question is produced amongst other countries is known as:

 

 

 

David Ricardo’s Theory of Comparative Advantage

 

 

 

Eli Hecksher and Bertil Ohlin’s Factor Endowment Theory

 

 

 

Adam Smith’s Theory of Absolute Advantage

 

 

 

Michael Porter’s Cluster Theory

 

 

 

 

 

 

 

 

 

 

10.          Which of the following drivers underpins the view that companies see themselves as global players and seek to counter their competitors’ international moves to retain global market share.

 

 

Cost driver

 

 

 

Competition driver

 

 

 

Market driver

 

 

 

Technology driver