Exam 6: Business-Government Trade Relations

Explain fully the reasons for import and export quotas.

Tariffs tend to exact a cost on countries as a whole because they lessen citizens' gains from trade.

Governments may intervene in markets to protect both imports and exports in industries deemed essential to national security.

Scenario: Not-So-Free Freeland Freeland is a semi-closed economy whose government believes in protecting national identity and becoming a self-sustaining country. The government's priority is to protect local jobs and provide opportunities to Freeland's emerging industries to flourish without the threat of external competition. -Protecting the national identity of a country can be classified as a(n) ________.

Explain the infant industry argument and several problems associated with it.

The notion that as an industry grows and matures it gains the knowledge it needs to become more innovative, efficient, and competitive is known as the ________.

Countries might impose a(n) ________ in response to the threat of an import quota or total ban on a product by an importing nation.

Which of the following is NOT true?

Scenario: Badland Joins the World Badland, a former totalitarian economy and pariah state, is taking steps toward a free market economy. The government wants to encourage trade but also wants to find a balance where local businesses and industries are not destroyed. -The government may want to impose an import quota for which of the following reasons?

Unwanted cultural influence in a nation can cause governments to block imports that it believes are harmful.

Scenario: Excelsior's Limited Excelsior's Limited, a maker of health and beauty aids, is expanding its presence in several countries around the world. Excelsior's president has been surprised at some of the responses the company has received from other countries. -When Excelsior's Limited tried to convert its earnings from one country, the government stipulated that the company had to exchange its currency rate at a very unfavorable rate. This is an example of a(n) ________.

A country that believes an imported product is being dumped on its market may impose a(n) ________ in retaliation.

Purposely understaffing customs offices to cause time delays, requiring special licenses that take a long time to obtain, and requiring air carriers to land at inconvenient airports are all examples of ________.

The beauty of strategic trade policy is that it has no drawbacks; everybody is a winner.

A tariff levied on an imported product and calculated partly as a percentage of its stated price and partly as a specific fee for each unit is referred to as a(n) ________ tariff.

Which of the following is a common instrument used by government to promote trade?

A designated geographic region in which merchandise is allowed to pass through with lower customs duties and/or fewer custom procedures is called a(n) ________.

An ________ is the most restrictive nontariff trade barrier and is typically applied to accomplish political goals.

Describe the different types of tariffs and provide an example of each.

A compound tariff is levied on an imported product and calculated partly as a percentage of its stated price, and partly as a specific fee for each unit.