Exam 6: Trade Regulations and Industrial Policies

Industrial policy attempts to foster the development of industries that offer long-run comparative disadvantages and which are insulated from other sectors of the economy.

In 1995,the General Agreement on Tariffs and Trade replaced the World Trade Organization as the body for governing the conduct of trade relations among member countries.

Assume that the United States imports chemicals from Germany.Trade theory predicts that if the German government grants an export subsidy to its chemical firms,the overall welfare of the United States will increase.

Figure 6.2 illustrates the calculator market for Mexico,assumed to be a small nation that is unable influence the South Korean (world) price.Assume the South Korean price to be $60 per calculator. Figure 6.2.Effects of an Export Subsidy -Consider Figure 6.2.As a result of the South Korean subsidy,Mexicans find their consumer surplus:

The Export-Import Bank provides export-credit subsidies to U.S.producers of agricultural goods.

The U.S."trade-remedy laws" could establish all of the following except:

The World Trade Organization primarily involves bilateral trade negotiations between two countries,say,the United States and China.

Figure 6.3 represents the Iraqi computer market.Assume Iraq purchases all of its computers from the United States. Figure 6.3 Iraqi Computer Market and Economic Sanctions -Consider Figure 6.3.Of the quota-induced change in Iraqi consumer surplus,the amount of the change in Iraq's consumer surplus that is transferred to other sectors of Iraq's economy is captured by the United States as:

The ______ was created to administer the provisions of multilateral trade agreements,to resolve international trade disagreements,and to meet periodically to consider new trade liberalization agreements

The effect of antidumping duties is to impose a floor on the price of foreign goods that are imported by the home country.

Under the normal-trade-relations (most-favored-nation) principle,two nations agree to apply tariffs to each other at rates as low as those applied to any other nation.

Figure 6.3 represents the Iraqi computer market.Assume Iraq purchases all of its computers from the United States. Figure 6.3 Iraqi Computer Market and Economic Sanctions -Consider Figure 6.3.In response to Iraq's armed invasion of neighboring countries,suppose the United States imposes a partial embargo that limits exports to Iraq to 10 computers.The export quota leads to an increase/decrease in the price of computers equal to $____,and an increase/decrease in consumer surplus equal to $____.

According to the escape clause,temporary trade restrictions may be imposed in industries where domestic producers are substantially being harmed by surging imports.

For the United States,which organization makes loans to foreign buyers of U.S.manufactured goods?

Under U.S.commercial policy,which clause permits the modification of a trade liberalization agreement on a temporary basis if serious injury occurs to domestic producers as a result of the agreement?

Under the World Trade Organization,the most recent round of multilateral trade negotiations was the

Among the codes of conduct addressed at the Tokyo Round of multilateral trade negotiations were customs valuation,product standards,subsidies and countervailing duties,government procurement policies,and import licensing procedures.

The Reciprocal Trade Agreements Act of 1934 authorized

In 1791,Alexander Hamilton presented to Congress his famous "Report on Manufacturers," which proposed that young industries of the United States be granted import protection.Hamilton was using the ______ to justify protection

Trade adjustment assistance policies