Portugal can produce wine and cloth with less labor than England. But, given all factors of production, England can produce cloth relatively better than Portugal. According to Ricardo's theory of comparative advantage, it make sense for England to
Answer: export cloth and import wine from Portugal.
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International Business
- Firms for which licensing is not a good option include those in
- Although it normally involves much longer-term commitments, franchising is essentially the service industry version of
- To encourage inward FDI, it is increasingly common for governments to
- Host governments use a range of controls to restrict inward FDI. The two most common are
- Which of the following is NOT an option in the service industry, due to the fact that many services have to be produced where they are sold?
- Caputo Fine Chemicals, a U.S. company, invested in a manufacturing facility in Mexico. The production from the Mexican facility was entirely used to serve the company's U.S. customers. Caputo Fine Chemicals' activity is called
- Which of the following is a major type of foreign investment risk that is insurable through government-backed programs?
- As an incentive to encourage domestic firms to undertake FDI, many countries have
- Which of the following is a home-country policy for limiting outward FDI?
- Offshore production refers to FDI undertaken
- Which of the following is most likely to be the effect of FDI in the form of a greenfield investment on the host country?
- Which of the following statements is most likely to be true regarding the adverse effects of FDI on the host country?
- Which account in the balance of payments records transactions involving the export and import of goods and services?
- A current account deficit is also known as a(n)
- When a country is importing more goods and services than it is exporting, it is incurring a(n)
- Which of the following is the only way to support a current account deficit in the long run?
- Which of the following statements is most likely to be true regarding the effects of FDI on employment?
- Direct effects of FDI on employment in the host country arise when a foreign MNE
- Indirect effects of FDI on employment in a host country arise when
- Which of the following are national accounts that track both payments to and receipts from other countries?
- The tendency to aggressively court FDI believed to be in the national interest of a country is an aspect of
- Which of the following is true regarding the pragmatic nationalist view of FDI?
- The main benefits of inward FDI for a host country arise from
- Foreign managers trained in the latest management techniques can often help to improve the efficiency of operations in the host country, whether those operations are acquired or greenfield developments. This benefit of FDI falls into the category of
- According to the _____, FDI has both benefits and costs and should be allowed only if the benefits outweigh the costs.