The New Trade Theory States That

question 51

Multiple Choice

The new trade theory states that

• A)the locus of global production initially switches from the United States to other advanced nations.
• B)world trade in certain products may be dominated by countries whose firms were first movers in their production.
• C)differences in technology may lead to differences in productivity,which in turn drives international trade patterns.
• D)differences in labor productivity between nations underlie the notion of comparative advantage.
• E)a rich country might actually be worse off by switching to a free trade regime with a poor nation.

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Definitions:

Citrus Orchard

An area of land dedicated to the cultivation of citrus trees, such as oranges, lemons, limes, and grapefruits, for fruit production.

Distribution Center

A warehouse or storage facility where goods are stored before they are distributed to retailers or customers.

Purchase Order

A purchase order is a formal document sent by a buyer to a seller to authorize the purchase of goods or services at agreed terms and conditions.

Breach of Contract

A breach of contract occurs when one party fails to fulfill their obligations under the contract's terms, allowing the other party to seek legal remedies.