Question 1

Administrative trade policies are

Accepted Answer

A)  requirements that some specific fraction of a good be produced domestically. 
B)  quotas on trade imposed by the exporting country. 
C)  bureaucratic rules designed to make it difficult for imports to enter a country. 
D)  designed to punish foreign firms that engage in dumping. 
A)  requirements that some specific fraction of a good be produced domestically. 
B)  quotas on trade imposed by the exporting country. 
C)  bureaucratic rules designed to make it difficult for imports to enter a country. 
D)  designed to punish foreign firms that engage in dumping. C

Question 2

Discuss the establishment of GATT. What was GATT's objective?

Accepted Answer

The GATT was a multilateral agreement whose objective was to liberalize trade by eliminating tariffs, subsidies, import quotas, and other trade barriers. GATT was established in 1947 with 19 members. Membership increased to more than 120 nations by the time it was superseded by the WTO. Under GATT, tariff reduction was spread over eight rounds. The last round, the Uruguay Round, resulted in the establishment of the WTO, which, among other things, took over the role of GATT in the global economy.

Question 3

Antidumping policies are designed to punish foreign firms that are engaged in dumping.

Accepted Answer

A) True 
 B)False  True

Question 4

________ is variously defined as selling goods in a foreign market at below their costs of production or as selling goods in a foreign market at below their "fair" market value.

Accepted Answer

A)  Export restraint 
B)  Dumping 
C)  Local content requirement 
D)  Ad valorem 
A)  Export restraint 
B)  Dumping 
C)  Local content requirement 
D)  Ad valorem

Question 5

Governments do not always act in the national interest when they intervene in the economy; politically important interest groups often influence them.

Accepted Answer

A) True 
 B)False

Question 6

What is the TRIPS agreement? Why was it established?

Accepted Answer

The 1995 Uruguay agreement that establis

Question 7

One of the successful outcomes of the Doha Round negotiations has been that many nations have proceeded with bilateral free trade agreements.

Accepted Answer

A) True 
 B)False

Question 8

According to ________, some specific fraction of a good must be produced domestically.

Accepted Answer

A)  import quotas 
B)  voluntary export restraints 
C)  local content requirements 
D)  antidumping duties 
A)  import quotas 
B)  voluntary export restraints 
C)  local content requirements 
D)  antidumping duties

Question 9

Economic problems during the Great Depression were compounded in 1930 when the U.S. Congress passed the ________, aimed at avoiding rising unemployment by protecting domestic industries and diverting consumer demand away from foreign products.

Accepted Answer

A)  Smoot-Hawley Act 
B)  Antidumping Act 
C)  Helms-Burton Act 
D)  D'Amato Act 
A)  Smoot-Hawley Act 
B)  Antidumping Act 
C)  Helms-Burton Act 
D)  D'Amato Act

Question 10

According to the ________ argument, governments should temporarily support new industries until they have grown strong enough to meet international competition.

Accepted Answer

A)  retaliatory action 
B)  human rights 
C)  infant industry 
D)  antidumping 
A)  retaliatory action 
B)  human rights 
C)  infant industry 
D)  antidumping

Question 11

The extra profit that producers make when supply is artificially limited by an import quota is referred to as a

Accepted Answer

A)  quota rent. 
B)  specific tariff. 
C)  tariff rate quota. 
D)  subsidy. 
A)  quota rent. 
B)  specific tariff. 
C)  tariff rate quota. 
D)  subsidy.

Question 12

Identify the true statement about trade barriers.

Accepted Answer

A)  They lower the costs of exporting products to a country. 
B)  They may put a firm at a competitive advantage to indigenous competitors. 
C)  They may help a firm to serve a country from locations outside of that country. 
D)  To conform to local content regulations, a firm may have to locate more production activities in a given market than it would otherwise. 
A)  They lower the costs of exporting products to a country. 
B)  They may put a firm at a competitive advantage to indigenous competitors. 
C)  They may help a firm to serve a country from locations outside of that country. 
D)  To conform to local content regulations, a firm may have to locate more production activities in a given market than it would otherwise.

Question 13

An ____ is a direct restriction on the quantity of some good that may be imported into a country.

Accepted Answer

A)  import tariff 
B)  import quota 
C)  import subsidy 
D)  ad valorem tariff 
A)  import tariff 
B)  import quota 
C)  import subsidy 
D)  ad valorem tariff

Question 14

GATT has not recognized the infant industry argument as a legitimate reason for protectionism.

Accepted Answer

A) True 
 B)False

Question 15

Economist Paul Krugman has suggested that trade policy designed to retaliate against another country's trade policy would

Accepted Answer

A)  benefit the multinational firms of both countries. 
B)  benefit the citizens of both countries. 
C)  hurt the multinational firms of both countries. 
D)  hurt the citizens of both countries. 
A)  benefit the multinational firms of both countries. 
B)  benefit the citizens of both countries. 
C)  hurt the multinational firms of both countries. 
D)  hurt the citizens of both countries.

Question 16

________ are levied as a proportion of the value of the imported good.

Accepted Answer

A)  Specific tariffs 
B)  Import quotas 
C)  Ad valorem tariffs 
D)  Tariff rate quotas 
A)  Specific tariffs 
B)  Import quotas 
C)  Ad valorem tariffs 
D)  Tariff rate quotas

Question 17

The TRIPS regulations established at the 1995 Uruguay Round

Accepted Answer

A)  established regulations on patents and copyrights. 
B)  set a new level of agriculture subsidies. 
C)  organized OECD countries to eliminate tariffs on textiles. 
D)  established new tariff levels on technology. 
A)  established regulations on patents and copyrights. 
B)  set a new level of agriculture subsidies. 
C)  organized OECD countries to eliminate tariffs on textiles. 
D)  established new tariff levels on technology.

Question 18

Governments use ________ to boost exports and restrict imports.

Accepted Answer

A)  subsidies 
B)  local content requirements 
C)  administrative trade policies 
D)  formal instruments of trade policy 
A)  subsidies 
B)  local content requirements 
C)  administrative trade policies 
D)  formal instruments of trade policy

Question 19

Tariff barriers lower the costs of exporting products to a country.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is a consequence of subsidies?

Accepted Answer

A)  Subsidies make domestic producers vulnerable to foreign competition. 
B)  Subsidies lead to lowered production. 
C)  Subsidies protect inefficient domestic producers. 
D)  Subsidies produce revenue for the government. 
A)  Subsidies make domestic producers vulnerable to foreign competition. 
B)  Subsidies lead to lowered production. 
C)  Subsidies protect inefficient domestic producers. 
D)  Subsidies produce revenue for the government.

Administrative trade policies are

Discuss the establishment of GATT. What was GATT's objective?

Antidumping policies are designed to punish foreign firms that are engaged in dumping.

________ is variously defined as selling goods in a foreign market at below their costs of production or as selling goods in a foreign market at below their "fair" market value.

Governments do not always act in the national interest when they intervene in the economy; politically important interest groups often influence them.

What is the TRIPS agreement? Why was it established?

One of the successful outcomes of the Doha Round negotiations has been that many nations have proceeded with bilateral free trade agreements.

According to ________, some specific fraction of a good must be produced domestically.

Economic problems during the Great Depression were compounded in 1930 when the U.S. Congress passed the ________, aimed at avoiding rising unemployment by protecting domestic industries and diverting consumer demand away from foreign products.

According to the ________ argument, governments should temporarily support new industries until they have grown strong enough to meet international competition.

The extra profit that producers make when supply is artificially limited by an import quota is referred to as a

Identify the true statement about trade barriers.

An ____ is a direct restriction on the quantity of some good that may be imported into a country.

GATT has not recognized the infant industry argument as a legitimate reason for protectionism.

Economist Paul Krugman has suggested that trade policy designed to retaliate against another country's trade policy would

________ are levied as a proportion of the value of the imported good.

The TRIPS regulations established at the 1995 Uruguay Round

Governments use ________ to boost exports and restrict imports.

Tariff barriers lower the costs of exporting products to a country.

Which of the following is a consequence of subsidies?

Globalization

National Differences in Political, Economic, and Legal Systems

National Differences in Economic Development

Differences in Culture

Ethics, Corporate Social Responsibility, and Sustainability

International Trade Theory

Foreign Direct Investment

Regional Economic Integration

The Foreign Exchange Market

The International Monetary System

The Global Capital Market

The Strategy of International Business

The Organization of International Business

Entry Strategy and Strategic Alliances

Exporting, Importing, and Countertrade

Global Production and Supply Chain Management

Global Marketing and R&D

Global Human Resource Management

Accounting and Finance in the International Business

Filters

Exam 7: Government Policy and International Trade

Administrative trade policies are

Discuss the establishment of GATT. What was GATT's objective?

Antidumping policies are designed to punish foreign firms that are engaged in dumping.

________ is variously defined as selling goods in a foreign market at below their costs of production or as selling goods in a foreign market at below their "fair" market value.

Governments do not always act in the national interest when they intervene in the economy; politically important interest groups often influence them.

What is the TRIPS agreement? Why was it established?

One of the successful outcomes of the Doha Round negotiations has been that many nations have proceeded with bilateral free trade agreements.

According to ________, some specific fraction of a good must be produced domestically.

Economic problems during the Great Depression were compounded in 1930 when the U.S. Congress passed the ________, aimed at avoiding rising unemployment by protecting domestic industries and diverting consumer demand away from foreign products.

According to the ________ argument, governments should temporarily support new industries until they have grown strong enough to meet international competition.

The extra profit that producers make when supply is artificially limited by an import quota is referred to as a

Identify the true statement about trade barriers.

An ____ is a direct restriction on the quantity of some good that may be imported into a country.

GATT has not recognized the infant industry argument as a legitimate reason for protectionism.

Economist Paul Krugman has suggested that trade policy designed to retaliate against another country's trade policy would

________ are levied as a proportion of the value of the imported good.

The TRIPS regulations established at the 1995 Uruguay Round

Governments use ________ to boost exports and restrict imports.

Tariff barriers lower the costs of exporting products to a country.

Which of the following is a consequence of subsidies?

Globalization

National Differences in Political, Economic, and Legal Systems

National Differences in Economic Development

Differences in Culture

Ethics, Corporate Social Responsibility, and Sustainability

International Trade Theory

Foreign Direct Investment

Regional Economic Integration

The Foreign Exchange Market

The International Monetary System

The Global Capital Market

The Strategy of International Business

The Organization of International Business

Entry Strategy and Strategic Alliances

Exporting, Importing, and Countertrade

Global Production and Supply Chain Management

Global Marketing and R&D

Global Human Resource Management

Accounting and Finance in the International Business

Filters