C211 Global Economics for Managers Practice Questions - Set 3 - Part 3

Correct Answer: c) Price elasticity of demand

Price elasticity of demand measures how much the quantity demanded of a good responds to changes in its price.

Correct Answer: b) Strategic trade theory

Strategic trade theory argues that governments should intervene to provide support to industries that have the potential to develop competitive advantages internationally.

Correct Answer: b) Property rights

Property rights refer to the legal rights to use a resource, such as land or intellectual property, and to derive income or benefits from it.

Correct Answer: a) Leverage

Leverage refers to the use of borrowed funds to amplify the returns on investment, allowing firms to increase their financial resources.

Correct Answer: a) Scenario planning

Scenario planning is a technique used to prepare for multiple possible future scenarios, allowing firms to develop strategies for high and low-risk outcomes.

Correct Answer: b) Trade deficit

A trade deficit occurs when a country's imports exceed its exports, resulting in a negative balance of trade.

Correct Answer: c) Resource mobility

Resource mobility refers to the ability of firms to adjust their production and reallocate resources to different industries or activities as market conditions change.

Correct Answer: c) Income from non-resident sources abroad

Gross National Income (GNI) includes income from non-resident sources abroad, in addition to the value of goods and services produced within a country (GDP).

Correct Answer: b) Reduced foreign competition

Government-imposed restrictions, such as tariffs or quotas, reduce foreign competition by limiting the entry of foreign goods into domestic markets.

Correct Answer: a) Multiplier effect

The multiplier effect refers to the additional shifts in aggregate demand that occur when expansionary fiscal policy increases income, leading to higher consumer spending.