1. Look at PengAtlas Maps 2.1 (Top Merchandise Importers and Exporters) and 2.2 (Top Service Importers and Exporters). Compare the global position of the United States in merchandise versus service imports and exports.
a.● Does the United States have an advantage globally in either merchandise or services? Does it have an advantage in both? If it has any type of advan- tage, is it absolute or comparative? Or does it have a disadvantage in both? Explain your answers.
b.● Imagine that you were asked to give reasons why you think it is good, from the US perspective, to have its position among the countries of the world as the top importer in both merchandise and services. What reasons would you mention?
2. Looking at PengAtlas Maps 2.1 and 2.2, given the size of US exports, why does the United States import so much? Why not use resources in the US to produce the things the US currently imports instead of using them to pro- duce exports?
3. ON CULTURE: Mercantilism involved a relatively significant amount of government control over both domestic and international activity, whereas Smith’s concept of absolute advantage focused on relative economic freedom and minimal government controls over domestic and international economic activity. Do you think that the values prevalent in American culture today are more in line with those of the mercantilists or those of Smith? If there is some combination of Smith and mercantilism, which tends to be dominant?
4. The rules of the game for international trading can be quite complex, so why do nations routinely engage in this activity?
1. What is the primary difference between FDI and FPI?
2. Why does the resource-based view suggest that the key word of FDI is direct?
3. How does horizontal FDI compare to vertical FDI?
4. How does internationalization help combat market imperfections and failures?