Exam 8: Government Intervention in International Business

Subsidies can help counterbalance harmful consequences that disproportionately affect the poor.

Minimizing Trade Barriers (Scenario) National Appliance Corporation (NAC) needs to build a new manufacturing facility to meet the increasing demand for professional-grade appliances. NAC managers are considering building the facility in Mexico but are hesitant because of the high tariffs involved. Another possible location for the facility is India; however, the country also imposes high tariffs. Wherever NAC builds a plant, parts will need to be imported from other nations. -Which of the following must NAC ensure in order to reduce exposure to trade barriers?

________ refer to rules that limit the ability of foreign firms to invest in certain industries or acquire local firms.

Governments sometimes retaliate against subsidies by imposing ________, tariffs on products imported into a country to offset subsidies given to producers or exporters in the exporting country.

Nations with economies based on agriculture and textile manufacturing generate more economic revenue than do nations with many high-tech industries.

A revenue tariff aims to protect domestic industries from foreign competition.

Governments impose defensive barriers to ________.

Which of the following countries has the lowest degree of economic freedom?

In 1938, the United States passed the Smoot-Hawley Tariff Act, which ________.

Economic freedom of a nation is based on the military capability, environmental wellness, and income of citizens.

Products are classified under about 8,000 different unique codes in the ________ schedule, a standardized system used worldwide.

The purpose of protectionism is to protect ________.

Which of the following is true about a nation's level of economic freedom?

Which of the following may allow a manufacturer to practice dumping?

Economic freedom flourishes when government supports the institutions necessary for that freedom and provides an appropriate level of intervention and regulation.

Governments impose offensive barriers to ________.

Governments impose offensive barriers to safeguard industries, workers, and special interest groups and to promote national security.

International Trade History (Scenario) The history of international trade is the subject of a report presented by Patrick Hinojosa to his international business class. Patrick addressed how the GATT impacted world trade, and how trade barriers have gradually disappeared. He described the protectionist policies implemented by Latin America during the 1950s. Patrick wrapped up his report by citing the rapid economic growth of Singapore, Hong Kong, and Taiwan during the 1970s and the post-World War II Japanese miracle. -Which of the following is Patrick most likely to cite as the policy implemented in Latin America that was intended to spur industrialization and economic growth?

In a short essay, explain how the GATT changed international trade.

Under the ________, Canada, Mexico, and the United States have eliminated nearly all tariffs on product imports from each other.