Question 1

Explain how governments restrict international trade and who benefits as well as who loses from the restrictions.

Accepted Answer

Governments use tariffs and nontariff ba

Question 2

When NAFTA was approved, Congress attempted to soften the losses suffered by some industries by

Accepted Answer

A)  imposing quotas. 
B)  reducing tariffs. 
C)  creating new jobs to hire workers who lost their jobs because of NAFTA. 
D)  setting aside funds to support and retrain workers who lost their jobs because of NAFTA. 
A)  imposing quotas. 
B)  reducing tariffs. 
C)  creating new jobs to hire workers who lost their jobs because of NAFTA. 
D)  setting aside funds to support and retrain workers who lost their jobs because of NAFTA.

Question 3

International trade is restricted because

Accepted Answer

A)  free trade creates an inefficient use of resources. 
B)  free trade leads to higher costs. 
C)  there is an uneven distribution of benefits and costs of free trade. 
D)  free trade stifles diversity and stability. 
A)  free trade creates an inefficient use of resources. 
B)  free trade leads to higher costs. 
C)  there is an uneven distribution of benefits and costs of free trade. 
D)  free trade stifles diversity and stability.

Question 4

Which of the following statements is true?

Accepted Answer

A)  International trade with reach industrial countries forces people in the developing countries to work for lower wages. 
B)  Unlike other types of international trade, offshoring does not bring any gains from trade. 
C)  International trade leads to job losses in both import competing industries and exporting industries. 
D)  International trade raises wages in developing countries. 
A)  International trade with reach industrial countries forces people in the developing countries to work for lower wages. 
B)  Unlike other types of international trade, offshoring does not bring any gains from trade. 
C)  International trade leads to job losses in both import competing industries and exporting industries. 
D)  International trade raises wages in developing countries.

Question 5

Which of the statements about the gains from international trade is correct?

Accepted Answer

A)  Everyone loses from international trade. 
B)  Everyone gains from international trade. 
C)  Some people gain from international trade and some lose; overall the gains exceed the losses. 
D)  Some people gain from international trade and some lose, though overall the gains exceed the losses. 
A)  Everyone loses from international trade. 
B)  Everyone gains from international trade. 
C)  Some people gain from international trade and some lose; overall the gains exceed the losses. 
D)  Some people gain from international trade and some lose, though overall the gains exceed the losses.

Question 6

The infant industry argument is based on the idea of:

Accepted Answer

A)  Global monopoly 
B)  Absolute productivity advantage 
C)  Countervailing duties 
D)  Dynamic comparative advantage 
A)  Global monopoly 
B)  Absolute productivity advantage 
C)  Countervailing duties 
D)  Dynamic comparative advantage

Question 7

The activities in which U.S. workers are relatively more productive

Accepted Answer

A)  pay higher wages. 
B)  are those in which the United States has a comparative advantage. 
C)  are at risk of disappearing from the United States when NAFTA is completed. 
D)  Both answers A and B are correct. 
A)  pay higher wages. 
B)  are those in which the United States has a comparative advantage. 
C)  are at risk of disappearing from the United States when NAFTA is completed. 
D)  Both answers A and B are correct.

Question 8

Suppose the country of Atlantica imposes a tariff on foreign- produced cars. As a result,

Accepted Answer

A)  there are more efficient trade agreements between Atlantica and its trade partners. 
B)  tariff revenue collected by the government in the Atlantica increases. 
C)  there is an increase in the number of imported cars. 
D)  the gains from trade rise. 
A)  there are more efficient trade agreements between Atlantica and its trade partners. 
B)  tariff revenue collected by the government in the Atlantica increases. 
C)  there is an increase in the number of imported cars. 
D)  the gains from trade rise.

Question 9

A tariff is

Accepted Answer

A)  an agreement to restrict the volume of exports. 
B)  a quantitative restriction of imports. 
C)  a licensing regulation that limits imports. 
D)  a tax on an imported good. 
A)  an agreement to restrict the volume of exports. 
B)  a quantitative restriction of imports. 
C)  a licensing regulation that limits imports. 
D)  a tax on an imported good.

Question 10

One reason that international trade is restricted is that

Accepted Answer

A)  the individual gain to parties who benefit from the protection will be much larger than the individual loss to parties who lose. 
B)  the government cannot measure the cost of protectionism. 
C)  protectionism benefits consumers. 
D)  the government completely pays the losers from international trade for their losses. 
A)  the individual gain to parties who benefit from the protection will be much larger than the individual loss to parties who lose. 
B)  the government cannot measure the cost of protectionism. 
C)  protectionism benefits consumers. 
D)  the government completely pays the losers from international trade for their losses.

Question 11

In a market open to international trade, at the world price the quantity demanded is 150 and quantity supplied is 200. This country will

Accepted Answer

A)  export 50 units. 
B)  export 200 units. 
C)  import 50 units. 
D)  import 150 units. 
A)  export 50 units. 
B)  export 200 units. 
C)  import 50 units. 
D)  import 150 units.

Question 12

When a firms "dumps" some of its products in another country, it

Accepted Answer

A)  is specializing according to comparative advantage. 
B)  increases the total level of employment in the receiving country. 
C)  creates an environmental hazard in the receiving country. 
D)  sells its products abroad at a price lower than it costs to produce the goods. 
A)  is specializing according to comparative advantage. 
B)  increases the total level of employment in the receiving country. 
C)  creates an environmental hazard in the receiving country. 
D)  sells its products abroad at a price lower than it costs to produce the goods.

Question 13

Currently, the United States has a quota on the amount of sugar that is allowed to be imported into the United States. What would happen to the price of sugar in the United States if the quota was removed? What would happen to U.S. consumption and U.S. production of sugar?

Accepted Answer

If the quota is removed, the p

Question 14

The Smoot- Hawley Act introduced

Accepted Answer

A)  opportunities for expanding U.S. foreign trade. 
B)  a framework promoting international free trade. 
C)  revenue tariffs as a major source of U.S. government revenues. 
D)  the highest tariffs set by the United States in the last 80 years. 
A)  opportunities for expanding U.S. foreign trade. 
B)  a framework promoting international free trade. 
C)  revenue tariffs as a major source of U.S. government revenues. 
D)  the highest tariffs set by the United States in the last 80 years.

Question 15

In 2006, the European Union (EU) threatened to ban imports of long- grain rice because traces of genetically modified rice were found mixed in to commercial supplies. Instead of a ban, suppose the EU placed a tariff on the import of long- grain rice. Which of the following would be an outcome of this tariff?

Accepted Answer

A)  The EU would gain tariff revenue 
B)  The price of long- grain rice in the EU would be higher with a tariff than if rice imports were completely banned 
C)  European rice producers would decrease production 
D)  The social loss would decrease 
A)  The EU would gain tariff revenue 
B)  The price of long- grain rice in the EU would be higher with a tariff than if rice imports were completely banned 
C)  European rice producers would decrease production 
D)  The social loss would decrease

Question 16

When a product is sold in a foreign country at a price that is lower than the cost of production, it is called

Accepted Answer

A)  dumping. 
B)  an escape clause. 
C)  a countervailing duty. 
D)  voluntary export restriction. 
A)  dumping. 
B)  an escape clause. 
C)  a countervailing duty. 
D)  voluntary export restriction.

Question 17

Suppose that the country of Pacifica sold its cars in Atlantica for less than it costs to produce the cars. Pacifica could be accused of

Accepted Answer

A)  dumping. 
B)  engaging in learning- by- doing. 
C)  avoiding import quotas. 
D)  increasing its gains from trade. 
A)  dumping. 
B)  engaging in learning- by- doing. 
C)  avoiding import quotas. 
D)  increasing its gains from trade.

Question 18

Suppose that the country of Pacifica imposes a quota on bananas. The reason that the government imposed this trade restriction could be

Accepted Answer

A)  lobbying from banana farmers in Pacifica. 
B)  comparative advantage. 
C)  that the government of Pacifica needs to increase its revenue. 
D)  Both answers A and B are correct. 
A)  lobbying from banana farmers in Pacifica. 
B)  comparative advantage. 
C)  that the government of Pacifica needs to increase its revenue. 
D)  Both answers A and B are correct.

Question 19

During the Great Depression in the 1930s, the average tariff level in the United States peaked at about

Accepted Answer

A)  100 percent. 
B)  zero. 
C)  20 percent. 
D)  6 percent. 
A)  100 percent. 
B)  zero. 
C)  20 percent. 
D)  6 percent.

Question 20

Tariffs _ the domestic price of the good and import quotas _ the domestic price of the good.

Accepted Answer

A)  lower; raise 
B)  lower; lower 
C)  raise; lower 
D)  raise; raise 
A)  lower; raise 
B)  lower; lower 
C)  raise; lower 
D)  raise; raise

Explain how governments restrict international trade and who benefits as well as who loses from the restrictions.

When NAFTA was approved, Congress attempted to soften the losses suffered by some industries by

International trade is restricted because

Which of the following statements is true?

Which of the statements about the gains from international trade is correct?

The infant industry argument is based on the idea of:

The activities in which U.S. workers are relatively more productive

Suppose the country of Atlantica imposes a tariff on foreign- produced cars. As a result,

A tariff is

One reason that international trade is restricted is that

In a market open to international trade, at the world price the quantity demanded is 150 and quantity supplied is 200. This country will

When a firms "dumps" some of its products in another country, it

Currently, the United States has a quota on the amount of sugar that is allowed to be imported into the United States. What would happen to the price of sugar in the United States if the quota was removed? What would happen to U.S. consumption and U.S. production of sugar?

The Smoot- Hawley Act introduced

When a product is sold in a foreign country at a price that is lower than the cost of production, it is called

Suppose that the country of Pacifica sold its cars in Atlantica for less than it costs to produce the cars. Pacifica could be accused of

Suppose that the country of Pacifica imposes a quota on bananas. The reason that the government imposed this trade restriction could be

During the Great Depression in the 1930s, the average tariff level in the United States peaked at about

Tariffs _ the domestic price of the good and import quotas _ the domestic price of the good.

What Is Economics

The Economic Problem

Demand and Supply

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: They Keynesian Model

U.S. Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

Filters

Exam 15: International Trade Policy

Explain how governments restrict international trade and who benefits as well as who loses from the restrictions.

When NAFTA was approved, Congress attempted to soften the losses suffered by some industries by

International trade is restricted because

Which of the following statements is true?

Which of the statements about the gains from international trade is correct?

The infant industry argument is based on the idea of:

The activities in which U.S. workers are relatively more productive

Suppose the country of Atlantica imposes a tariff on foreign- produced cars. As a result,

A tariff is

One reason that international trade is restricted is that

In a market open to international trade, at the world price the quantity demanded is 150 and quantity supplied is 200. This country will

When a firms "dumps" some of its products in another country, it

Currently, the United States has a quota on the amount of sugar that is allowed to be imported into the United States. What would happen to the price of sugar in the United States if the quota was removed? What would happen to U.S. consumption and U.S. production of sugar?

The Smoot- Hawley Act introduced

When a product is sold in a foreign country at a price that is lower than the cost of production, it is called

Suppose that the country of Pacifica sold its cars in Atlantica for less than it costs to produce the cars. Pacifica could be accused of

Suppose that the country of Pacifica imposes a quota on bananas. The reason that the government imposed this trade restriction could be

During the Great Depression in the 1930s, the average tariff level in the United States peaked at about

Tariffs _ the domestic price of the good and import quotas _ the domestic price of the good.

What Is Economics

The Economic Problem

Demand and Supply

Measuring Gdp and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: They Keynesian Model

U.S. Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

Filters