Exam 11: International Trade in the Global Marketplace

There is a direct correlation between economic freedom and prosperity; the more economically free a country, the more prosperous it tends to be and vice versa.

An infant industry is one that

Liberals emphasize the mutual gains (absolute gains) of global trade whereas mercantilists are more concerned with relative gains.

The trade theory of liberalism holds that open trade borders and minimal government intervention will maximize global welfare.

Hegemons are initially intolerant of nations called free riders, because they immediately take advantage of free trade before they eventually begin to repay the hegemon.

The GATT principle of nondiscrimination that called for all foreign goods to be treated equally with domestic goods, and that countries are not able to enact policies, such as taxes, to give their products an advantage over foreign products is called _____.

According to the most-favored-nation (MFN) principle,

The large increase in trade integration comes from Global North countries.

Liberal trade theorists advocate the use of quotas, tariffs, and other barriers to protect local industry from import competition and "bring the jobs back home."

GATT stands for General Agreement on Tariffs and Trade.