Why Should Managers in International Business Understand International Trade Theories

question 20

Multiple Choice

Why should managers in international business understand international trade theories?

• A) Countries' trade policies, based on trade theories, influence which products companies might export to given countries.
• B) The understanding helps managers decide whether their companies should follow laissez-faire management practices.
• C) The theories help managers decide whether to use large-scale versus small-scale technologies for serving their export markets.
• D) The comprehension is useful when deciding whether to transfer managers abroad to manage foreign operations.

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Definitions:

Current Liabilities

Short-term financial obligations that are due within one year or within the normal operating cycle of the business, which require the use of current assets or the creation of other current liabilities to settle.

Working Capital

The difference between a company's current assets and current liabilities, used to measure its short-term financial health and operational efficiency.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the business's normal operating cycle if longer.

Current Liabilities

Financial obligations of a business that are due and payable within one year, including accounts payable, short-term loans, and other short-term debts.