SECTION A

Part One: Multiple Choice
Ans.1 B. Location
Ans.2. D . All of the above
Ans.3. B. Price
Ans.4. A. 1958
Ans.5.C. 1990
Ans.6. C. Culture
Ans.7. A. Product
Ans.8. C. Trademark
Ans.9. A. Global Market
Ans.10. C. Evaluative process

PART- II
1. What do you understand by “ Inward-oriented Policies”?

Ans. An inward- oriented policy, usually , means over protection. What is less obvious is that sheltering domestic industries puts exports at a great disadvantage because it raises the cost of the foreign inputs used in their production. Moreover, an increase in the relative costs of domestic inputs may also occur through inflation or because of appreciation of the exchange rate as import restrictions are …show more content…

2. Is it fair to point the blame for the EU’s poor international competitiveness at inflexible labour markets, regulated goods and services markets, and a general lack of competition? What alternative explanations might be suggested?
Ans. It is not fair to blame only at inflexible labour markets, regulated goods and service markets and general lack of competition but other factors also to be taken care of. The competitiveness depends on country’s natural resources, its stock of machinery and equipment and skills of its workers in creating goods and services that people want to buy. Natural resources are predetermined and must be used efficiently, but a country’s infrastructure and its workers skills have to be developed over time.
The Competitive Index describe eight factors of competitiveness, these are
• Openness of the economy to international trade and finance
• Role of Government Budget and regulation
• Development of financial markets
• Quality of infrastructure
• Quality of technology
• Quality of business management
• Quality of judicial and political institutions
• Quality of labour markets flexibility

Caselet 2

1. What are some current issues facing Peru? What is the climate for doing business in the Peru today?
Ans The Peru is facing the issues of increasing GDP and per capita income of $4300