Question 1

Which of the following is true regarding the protection of infant industries from international competition?

Accepted Answer

A)  It is difficult for governments to identify the industries worth protecting. 
B)  Protection of infant industries helps domestic companies become innovative. 
C)  Protection from competition leads to improved quality and lower prices. 
D)  Protection leads to more economic good than harm. 
A)  It is difficult for governments to identify the industries worth protecting. 
B)  Protection of infant industries helps domestic companies become innovative. 
C)  Protection from competition leads to improved quality and lower prices. 
D)  Protection leads to more economic good than harm.

Question 2

When a company exports a product at a price lower than the price normally charged in its domestic market,it is said to be dumping.

Accepted Answer

A) True 
 B)False

Question 3

One of the main goals of the World Trade Organization is to ________.

Accepted Answer

A)  encourage dumping among trading nations 
B)  restrict the free flow of trade 
C)  provide favorable terms of trade to a few selected countries 
D)  settle trade disputes among its members 
A)  encourage dumping among trading nations 
B)  restrict the free flow of trade 
C)  provide favorable terms of trade to a few selected countries 
D)  settle trade disputes among its members

Question 4

Which of the following is true of government interventions in a country's trade practices?

Accepted Answer

A)  Lower restrictions should be placed on products coming from countries where a government has a large sphere of political influence. 
B)  A major political motive behind government intervention in trade is the protection of infant industries. 
C)  Government interventions help companies take advantage of economies of scale and be the first movers in their industries. 
D)  Governments intervene to protect only imports, as the protection of exports is handled by private agencies. 
A)  Lower restrictions should be placed on products coming from countries where a government has a large sphere of political influence. 
B)  A major political motive behind government intervention in trade is the protection of infant industries. 
C)  Government interventions help companies take advantage of economies of scale and be the first movers in their industries. 
D)  Governments intervene to protect only imports, as the protection of exports is handled by private agencies.

Question 5

Scenario: Konesia Joins the World
Konesia, 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 so that local businesses and industries are not harmed.
-Konesia has created a hybrid form of trade restriction-a lower tariff rate for a certain quantity of imports and a higher rate for quantities that exceed the quota.This is an example of a(n)________.

Accepted Answer

A)  compound tariff 
B)  export quota 
C)  ad valorem tariff 
D)  tariff-quota 
A)  compound tariff 
B)  export quota 
C)  ad valorem tariff 
D)  tariff-quota

Question 6

Which of the following is true of quotas?

Accepted Answer

A)  They are the most common type of trade barrier. 
B)  They help domestic producers maintain their market shares and prices. 
C)  Their licenses are granted by governments to other nation companies on a five-year basis. 
D)  They lead to a decrease in the prices of intermediate goods. 
A)  They are the most common type of trade barrier. 
B)  They help domestic producers maintain their market shares and prices. 
C)  Their licenses are granted by governments to other nation companies on a five-year basis. 
D)  They lead to a decrease in the prices of intermediate goods.

Question 7

Describe the role of special government agencies in promoting exports and imports.

Accepted Answer

The governments of most nations have spe

Question 8

A(n)________ is calculated to offset the advantage an exporter receives from a subsidy.

Accepted Answer

A)  compound tariff 
B)  export promotion 
C)  countervailing duty 
D)  substitution tariff 
A)  compound tariff 
B)  export promotion 
C)  countervailing duty 
D)  substitution tariff

Question 9

Which of the following is an instrument that governments use to promote trade?

Accepted Answer

A)  embargoes 
B)  tariffs 
C)  export financing 
D)  administrative delays 
A)  embargoes 
B)  tariffs 
C)  export financing 
D)  administrative delays

Question 10

When one World Trade Organization member files a complaint against another,decisions are to be rendered in less than one year.

Accepted Answer

A) True 
 B)False

Question 11

Products manufactured in Brazil are transported through Mexico on their way to England.Mexico applies a tariff on the goods.What type of tariff is implemented by Mexico?

Accepted Answer

A)  transit tariff 
B)  ad valorem tariff 
C)  export tariff 
D)  compound tariff 
A)  transit tariff 
B)  ad valorem tariff 
C)  export tariff 
D)  compound tariff

Question 12

Scenario: Not-So-Free Freeland
Freeland is a semi-closed economy whose government believes in protecting national identity and building a self-sustained economy. 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.
-The belief that Freeland's emerging industries need protection from international competition during their development phase is an example of ________.

Accepted Answer

A)  a local content requirement 
B)  a normal trade relation 
C)  the infant industry argument 
D)  the political motive of Freeland 
A)  a local content requirement 
B)  a normal trade relation 
C)  the infant industry argument 
D)  the political motive of Freeland

Question 13

The ________ proposes that tariffs be imposed on imported manufactured goods to give U.S.firms temporary protection from foreign competition until they can fully establish themselves.

Accepted Answer

A)  national defense argument 
B)  infant industry argument 
C)  industrial policy 
D)  strategic trade theory 
A)  national defense argument 
B)  infant industry argument 
C)  industrial policy 
D)  strategic trade theory

Question 14

Scenario: Excelsior's Limited
Excelsior's Limited, a manufacturer of health and beauty aids, is expanding its presence in several countries around the world. Excelsior's president is surprised at some of the responses the company is receiving from other countries.
-France gave Excelsior's Limited permission to export its product as long as the company obtained a special license first.Excelsior has been waiting six months for the license and is wondering if it will ever arrive.Excelsior's Limited is experiencing a(n)________.

Accepted Answer

A)  administrative delay 
B)  local content requirement 
C)  embargo 
D)  currency control 
A)  administrative delay 
B)  local content requirement 
C)  embargo 
D)  currency control

Question 15

Which of the following is a method of restricting trade?

Accepted Answer

A)  export financing 
B)  local content requirements 
C)  subsidy 
D)  foreign trade zones 
A)  export financing 
B)  local content requirements 
C)  subsidy 
D)  foreign trade zones

Question 16

Industries considered essential to national security often receive government-sponsored protection.

Accepted Answer

A) True 
 B)False

Question 17

Discuss the benefits and drawbacks of strategic trade policy.How are the drawbacks of subsidies similar to the drawbacks of strategic trade policy?

Accepted Answer

Benefits of Strategic Trade Policy-Suppo

Question 18

The protection of infant industries by a nation's government can cause domestic companies to become complacent toward innovation.

Accepted Answer

A) True 
 B)False

Question 19

Describe the main political motives behind government intervention in trade.

Accepted Answer

Government officials often make trade-re

Question 20

An embargo is the most restrictive nontariff trade barrier available.

Accepted Answer

A) True 
 B)False

Which of the following is true regarding the protection of infant industries from international competition?

When a company exports a product at a price lower than the price normally charged in its domestic market,it is said to be dumping.

One of the main goals of the World Trade Organization is to ________.

Which of the following is true of government interventions in a country's trade practices?

Which of the following is true of quotas?

Describe the role of special government agencies in promoting exports and imports.

A(n)________ is calculated to offset the advantage an exporter receives from a subsidy.

Which of the following is an instrument that governments use to promote trade?

When one World Trade Organization member files a complaint against another,decisions are to be rendered in less than one year.

Products manufactured in Brazil are transported through Mexico on their way to England.Mexico applies a tariff on the goods.What type of tariff is implemented by Mexico?

The ________ proposes that tariffs be imposed on imported manufactured goods to give U.S.firms temporary protection from foreign competition until they can fully establish themselves.

Which of the following is a method of restricting trade?

Industries considered essential to national security often receive government-sponsored protection.

Discuss the benefits and drawbacks of strategic trade policy.How are the drawbacks of subsidies similar to the drawbacks of strategic trade policy?

The protection of infant industries by a nation's government can cause domestic companies to become complacent toward innovation.

Describe the main political motives behind government intervention in trade.

An embargo is the most restrictive nontariff trade barrier available.

Globalization

Cross-Cultural Business

Political Economy and Ethics

Economic Development of Nations

International Trade Theory

Foreign Direct Investment

Regional Economic Integration

International Financial Markets

International Monetary System

International Strategy and Organization

Analyzing International Opportunities

Selecting and Managing Entry Modes

Developing and Marketing Products

Managing International Operations

Hiring and Managing Employees

Filters

Exam 6: Political Economy of Trade

Which of the following is true regarding the protection of infant industries from international competition?

When a company exports a product at a price lower than the price normally charged in its domestic market,it is said to be dumping.

One of the main goals of the World Trade Organization is to ________.

Which of the following is true of government interventions in a country's trade practices?

Which of the following is true of quotas?

Describe the role of special government agencies in promoting exports and imports.

A(n)________ is calculated to offset the advantage an exporter receives from a subsidy.

Which of the following is an instrument that governments use to promote trade?

When one World Trade Organization member files a complaint against another,decisions are to be rendered in less than one year.

Products manufactured in Brazil are transported through Mexico on their way to England.Mexico applies a tariff on the goods.What type of tariff is implemented by Mexico?

The ________ proposes that tariffs be imposed on imported manufactured goods to give U.S.firms temporary protection from foreign competition until they can fully establish themselves.

Which of the following is a method of restricting trade?

Industries considered essential to national security often receive government-sponsored protection.

Discuss the benefits and drawbacks of strategic trade policy.How are the drawbacks of subsidies similar to the drawbacks of strategic trade policy?

The protection of infant industries by a nation's government can cause domestic companies to become complacent toward innovation.

Describe the main political motives behind government intervention in trade.

An embargo is the most restrictive nontariff trade barrier available.

Globalization

Cross-Cultural Business

Political Economy and Ethics

Economic Development of Nations

International Trade Theory

Foreign Direct Investment

Regional Economic Integration

International Financial Markets

International Monetary System

International Strategy and Organization

Analyzing International Opportunities

Selecting and Managing Entry Modes

Developing and Marketing Products

Managing International Operations

Hiring and Managing Employees

Filters