Question 1

Quotas and tariffs can:

Accepted Answer

A) have the same effect on the price of a domestically produced good if they are set appropriately. 
B) never have the same effect on imports and import prices. 
C) both increase international trade by the same amount if set appropriately. 
D) yield the same amount of tax revenue if they are set appropriately. 
A) have the same effect on the price of a domestically produced good if they are set appropriately. 
B) never have the same effect on imports and import prices. 
C) both increase international trade by the same amount if set appropriately. 
D) yield the same amount of tax revenue if they are set appropriately. A

Question 2

A free trade association is a group of countries that allows free trade among its members and, as a group, puts up common barriers against all other countries' goods.

Accepted Answer

A) True 
 B)False  True

Question 3

Regulatory trade restrictions:

Accepted Answer

A) are always justified. 
B) are never justified. 
C) may be justified depending on the nature of the restriction. 
D) are irrelevant since they are seldom used. 
A) are always justified. 
B) are never justified. 
C) may be justified depending on the nature of the restriction. 
D) are irrelevant since they are seldom used. C

Question 4

After one cow in Alberta, Canada was found with mad cow disease, the United States banned all imports of Canadian cattle and beef. This action is an example of:

Accepted Answer

A) a tariff. 
B) a quota. 
C) a regulatory trade restriction. 
D) a sanction. 
A) a tariff. 
B) a quota. 
C) a regulatory trade restriction. 
D) a sanction.

Question 5

What role do appeals to national security play in arguments to justify trade restrictions? What forms do these restrictions take?

Accepted Answer

National security is often used as a rea

Question 6

Trade adjustment assistance is:

Accepted Answer

A) difficult to implement because the adjustment costs of international trade are generally greater than the gains from trade. 
B) difficult to implement because claims of injury are easy to make and may be politically difficult to reject. 
C) easy to implement because the adjustment costs of international trade are typically less than the gains from trade. 
D) easy to implement because it is easy to identify the few industries genuinely injured by international trade. 
A) difficult to implement because the adjustment costs of international trade are generally greater than the gains from trade. 
B) difficult to implement because claims of injury are easy to make and may be politically difficult to reject. 
C) easy to implement because the adjustment costs of international trade are typically less than the gains from trade. 
D) easy to implement because it is easy to identify the few industries genuinely injured by international trade.

Question 7

Which of the following groups would be most likely to benefit from a tariff on Japanese-manufactured light trucks (i.e. , pickup trucks)?

Accepted Answer

A) U.S. domestic pickup truck manufacturers 
B) Japanese auto workers 
C) U.S. consumers of pickup trucks 
D) U.S. firms that export products to Japan 
A) U.S. domestic pickup truck manufacturers 
B) Japanese auto workers 
C) U.S. consumers of pickup trucks 
D) U.S. firms that export products to Japan

Question 8

Domestic producers prefer quotas to tariffs because quotas raise the price of imports and tariffs do not.

Accepted Answer

A) True 
 B)False

Question 9

Most economists:

Accepted Answer

A) oppose free trade. 
B) favor free trade. 
C) have no opinion on free trade. 
D) would prefer to have no trade with other nations. 
A) oppose free trade. 
B) favor free trade. 
C) have no opinion on free trade. 
D) would prefer to have no trade with other nations.

Question 10

Refer to the graph shown.   As a result of a tariff T imposed on speedboats, the price domestic consumers pay for speedboats probably will likely be:

Accepted Answer

A) P1. 
B) P2. 
C) P3. 
D) P4. 
A) P1. 
B) P2. 
C) P3. 
D) P4.

Question 11

The infant industry argument for protection is rejected by most economists because:

Accepted Answer

A) they oppose any government intervention. 
B) historical experience supports it. 
C) many infant industries become reliant on protection and do not mature. 
D) protection usually is provided only temporarily. 
A) they oppose any government intervention. 
B) historical experience supports it. 
C) many infant industries become reliant on protection and do not mature. 
D) protection usually is provided only temporarily.

Question 12

When the United States imposed restrictions on imported steel in the 1950s and 1960s, the U.S. steel industry responded by:

Accepted Answer

A) raising prices and investing more in steel production. 
B) raising prices and channeling profits from their steel production into other activities. 
C) lowering prices and investing more in steel production. 
D) lowering prices and channeling profits from their steel production into other activities. 
A) raising prices and investing more in steel production. 
B) raising prices and channeling profits from their steel production into other activities. 
C) lowering prices and investing more in steel production. 
D) lowering prices and channeling profits from their steel production into other activities.

Question 13

Duties imposed by the U.S. government on imported Chinese frozen and canned shrimp are an example of:

Accepted Answer

A) tariffs. 
B) quotas. 
C) voluntary restrictions. 
D) regulatory trade restrictions. 
A) tariffs. 
B) quotas. 
C) voluntary restrictions. 
D) regulatory trade restrictions.

Question 14

The WTO authorized several countries to impose about $150 million in trade sanctions against the United States in retaliation for a U.S. import law that the WTO ruled to be illegal. The organization that issued this ruling against the United States is known as the:

Accepted Answer

A) Wage Tariff Objective. 
B) World Trade Organization. 
C) Wealth Technology Order. 
D) Welfare Tax Order. 
A) Wage Tariff Objective. 
B) World Trade Organization. 
C) Wealth Technology Order. 
D) Welfare Tax Order.

Question 15

Which of the following is not a regulatory trade restriction?

Accepted Answer

A) Vegetables prohibited because of excess pesticide usage 
B) Inspections designed to impede trade processes 
C) A limit on the number of imported cars 
D) Leather products banned because of tanning by urine 
A) Vegetables prohibited because of excess pesticide usage 
B) Inspections designed to impede trade processes 
C) A limit on the number of imported cars 
D) Leather products banned because of tanning by urine

Question 16

The central goal of the General Agreement on Tariffs and Trade (GATT)was to:

Accepted Answer

A) promote free trade associations and customs unions. 
B) ensure a balance of trade between countries. 
C) reduce trade barriers. 
D) promote international security. 
A) promote free trade associations and customs unions. 
B) ensure a balance of trade between countries. 
C) reduce trade barriers. 
D) promote international security.

Question 17

One impact of an import quota is to:

Accepted Answer

A) increase both domestic production and domestic prices. 
B) increase domestic production and reduce domestic prices. 
C) reduce domestic production and increase domestic prices. 
D) reduce both domestic production and domestic prices. 
A) increase both domestic production and domestic prices. 
B) increase domestic production and reduce domestic prices. 
C) reduce domestic production and increase domestic prices. 
D) reduce both domestic production and domestic prices.

Question 18

A developing country can be expected to rely more on:

Accepted Answer

A) tariffs than quotas since tariffs are an easy way to raise tax revenue. 
B) tariffs than quotas because tariffs are more effective means of reducing imports. 
C) quotas than tariffs since quotas provide better protection for infant industries. 
D) quotas than tariffs since quotas are easier to enforce and give rise to less corruption among officials. 
A) tariffs than quotas since tariffs are an easy way to raise tax revenue. 
B) tariffs than quotas because tariffs are more effective means of reducing imports. 
C) quotas than tariffs since quotas provide better protection for infant industries. 
D) quotas than tariffs since quotas are easier to enforce and give rise to less corruption among officials.

Question 19

A group of countries that allows free trade among its members and puts up common barriers against all other countries' goods is called:

Accepted Answer

A) a tariff-free zone. 
B) a most-favored-nation agreement. 
C) an autarky. 
D) a free trade association. 
A) a tariff-free zone. 
B) a most-favored-nation agreement. 
C) an autarky. 
D) a free trade association.

Question 20

With what countries or regions does the United States trade the most?

Accepted Answer

As of 2008,exports to Canada and Mexico

Exam 10: International Trade Policy

Quotas and tariffs can:

A free trade association is a group of countries that allows free trade among its members and, as a group, puts up common barriers against all other countries' goods.

Regulatory trade restrictions:

After one cow in Alberta, Canada was found with mad cow disease, the United States banned all imports of Canadian cattle and beef. This action is an example of:

What role do appeals to national security play in arguments to justify trade restrictions? What forms do these restrictions take?

Trade adjustment assistance is:

Which of the following groups would be most likely to benefit from a tariff on Japanese-manufactured light trucks (i.e. , pickup trucks)?

Domestic producers prefer quotas to tariffs because quotas raise the price of imports and tariffs do not.

Most economists:

Refer to the graph shown. As a result of a tariff T imposed on speedboats, the price domestic consumers pay for speedboats probably will likely be:

The infant industry argument for protection is rejected by most economists because:

When the United States imposed restrictions on imported steel in the 1950s and 1960s, the U.S. steel industry responded by:

Duties imposed by the U.S. government on imported Chinese frozen and canned shrimp are an example of:

The WTO authorized several countries to impose about $150 million in trade sanctions against the United States in retaliation for a U.S. import law that the WTO ruled to be illegal. The organization that issued this ruling against the United States is known as the:

Which of the following is not a regulatory trade restriction?

The central goal of the General Agreement on Tariffs and Trade (GATT)was to:

One impact of an import quota is to:

A developing country can be expected to rely more on:

A group of countries that allows free trade among its members and puts up common barriers against all other countries' goods is called:

With what countries or regions does the United States trade the most?

Economics and Economic Reasoning

The Production Possibility Model, Trade, and Globalization

Economic Institutions

Supply and Demand

Using Supply and Demand

Describing Supply and Demand: Elasticities

Taxation and Government Intervention

Market Failure Versus Government Failure

Comparative Advantage, Exchange Rates, and Globalization

Production and Cost Analysis I

Production and Cost Analysis II

Perfect Competition

Monopoly and Monopolistic Competition

Oligopoly and Antitrust Policy

Real-World Competition and Technology

Work and the Labor Market

Who Gets What the Distribution of Income

The Logic of Individual Choice: the Foundation of Supply and Demand

Game Theory, Strategic Decision Making, and Behavioral Economics

Thinking Like a Modern Economist

Behavioral Economics and Modern Economic Policy

Microeconomic Policy, Economic Reasoning, and Beyond

Economic Growth, Business Cycles, and Unemployment

Measuring and Describing the Aggregate Economy

The Keynesian Short-Run Policy Model: Demand-Side Policies

The Classical Long-Run Policy Model: Growth and Supply-Side Policies

The Financial Sector and the Economy

Monetary Policy

Financial Crises, Panics, and Unconventional Monetary Policy

Deficits and Debt: the Austerity Debate

The Fiscal Policy Dilemma

Jobs and Unemployment

Inflation, Deflation, and Macro Policy

International Financial Policy

Macro Policy in a Global Setting

Structural Stagnation and Globalization

Macro Policy in Developing Countries

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