Question

16

Mark X if True.     _____One of the main advantages of doing Domestic Business instead of international Business is that Domestic Businesses can focus on their local environment and not have to worry about International Business. _{__________}Large businesses who are very profitable and growing domestically can impact a nation’s BOP even if they do no I/B.

17

(a)   What are the 5 Stages of Regional Economic Integration--please write them in the right order (I)______         (2) ______          (3)________ (4)________       (5)________           (b) How many Economic Unions have reached the 5^th Stage_______

18

Match following with: Absolute Advantage; Comparative Advantage; _________________________ The ability of one country to produce more goods & services from the same amount of resources than another country;                                                        __________________________When a country has an advantage resulting from having resource endowments such as oil or farm land that its competitors may not have, .

Answer 1

16)a.True

( Worrying about international operations can be avoided in such a situation.)

b.False

( A large firm will still be able to influence BOP as it would often require imports for its growing operations.)

17)a. 5 stages of economic integration are as follows

1. Free trade Area

2 Customs union

3. Common market

4.Economic union

5.Complete economic integration

b.1 (At present only European union has reached complete economic integration.)

18) a) Absolute advantage

b) comparative advantage

( Ability of country to produce more of a good than other country with the same amount of resources can be termed as absolute advantage.

Resource endowment enables the country to produce a good with less opportunity cost than another country providing it with a comparative advantage.)