Question 1

The General Agreement on Tariffs and Trade (GATT)was replaced by which of the following organizations?

Accepted Answer

A) The Organisation for Economic Co-operation and Development (OEC
D)  
B) The World Bank (W
B)  
C) The Bank for International Settlements (BIS) 
D) The World Trade Organization (WTO) 
A) The Organisation for Economic Co-operation and Development (OEC
D)  
B) The World Bank (W
B)  
C) The Bank for International Settlements (BIS) 
D) The World Trade Organization (WTO)

Question 2

What is most-favored-nation trading status?

Accepted Answer

A) When countries give each other the same trade concessions they give to all other countries 
B) When a country gives special trade privileges to a close ally 
C) When a country spares no expense to increase trade with another country 
D) When a country promotes trade with military allies 
A) When countries give each other the same trade concessions they give to all other countries 
B) When a country gives special trade privileges to a close ally 
C) When a country spares no expense to increase trade with another country 
D) When a country promotes trade with military allies

Question 3

Which of the following is an example of specialization and division of labor?

Accepted Answer

A) A farm family building its own tractor 
B) A worker in a Toyota plant welding a rear axle on a Corolla all day,every day 
C) A popular motorcycle manufacturer beginning to produce small automobiles 
D) Workers in a bottling plant rotating positions on the assembly line in order to master the entire process 
A) A farm family building its own tractor 
B) A worker in a Toyota plant welding a rear axle on a Corolla all day,every day 
C) A popular motorcycle manufacturer beginning to produce small automobiles 
D) Workers in a bottling plant rotating positions on the assembly line in order to master the entire process

Question 4

Why have the United States and other developed countries become less supportive of trade recently? What effect has this decreased support had (or will it likely have in the future)?

Accepted Answer

Answers will vary.Students should note t

Question 5

What is the theory of hegemonic stability?

Accepted Answer

A) The spread of free trade throughout the world will lead to a stable single trading system. 
B) The longer countries keep their free-trade policies,the more likely they are to remain pro-free trade. 
C) Having one single hegemonic source of information can improve the chances of stability in international trade. 
D) One large state that is willing and powerful enough can solve the collective action problems of international trade. 
A) The spread of free trade throughout the world will lead to a stable single trading system. 
B) The longer countries keep their free-trade policies,the more likely they are to remain pro-free trade. 
C) Having one single hegemonic source of information can improve the chances of stability in international trade. 
D) One large state that is willing and powerful enough can solve the collective action problems of international trade.

Question 6

Which of the following is explained well by the Stolper-Samuelson theorem?

Accepted Answer

A) Farmers in land-poor France tend to favor liberal trade policies. 
B) Farmers in land-rich Argentina tend to favor liberal trade policies. 
C) Workers in the scarce-labor United States tend to oppose protectionist trade policies. 
D) Workers in labor-rich Bangladesh tend to favor protectionist trade policies. 
A) Farmers in land-poor France tend to favor liberal trade policies. 
B) Farmers in land-rich Argentina tend to favor liberal trade policies. 
C) Workers in the scarce-labor United States tend to oppose protectionist trade policies. 
D) Workers in labor-rich Bangladesh tend to favor protectionist trade policies.

Question 7

What is true of a state that adopts a tariff in the scenario depicted in the figure?

Accepted Answer

A) It will increase domestic consumption of the goods. 
B) It will have no effect on domestic consumption of the goods. 
C) It will decrease domestic production of the goods. 
D) It will increase domestic production of the goods. 
A) It will increase domestic consumption of the goods. 
B) It will have no effect on domestic consumption of the goods. 
C) It will decrease domestic production of the goods. 
D) It will increase domestic production of the goods.

Question 8

Which of the following is most likely to benefit from protectionism?

Accepted Answer

A) Consumers of all goods,because they are protected from inferior products 
B) Consumers of imported products 
C) Domestic producers of goods that are also imported from foreign countries 
D) Domestic producers of goods that are exported to other countries 
A) Consumers of all goods,because they are protected from inferior products 
B) Consumers of imported products 
C) Domestic producers of goods that are also imported from foreign countries 
D) Domestic producers of goods that are exported to other countries

Question 9

What is "dumping"?

Accepted Answer

A) Subsidizing domestic production of goods 
B) Destroying imports that exceed a country's quota 
C) Outsourcing low-skilled jobs to a cheaper location 
D) Selling goods below their cost of production 
A) Subsidizing domestic production of goods 
B) Destroying imports that exceed a country's quota 
C) Outsourcing low-skilled jobs to a cheaper location 
D) Selling goods below their cost of production

Question 10

Why can trade negotiations between two countries be viewed as a Prisoner's Dilemma?

Accepted Answer

A) While mutual free trade is better than mutual protection for both countries,each country may have an incentive to unilaterally impose protection if they care more about producers than consumers. 
B) Trade negotiations often hold other elements of diplomacy "hostage" while they are ongoing. 
C) If all sides in the negotiations reveal all of the information about their industrial capabilities and production plans,specialization can more easily occur,but both sides also have an incentive to keep quiet and use their industrial secrets to exploit the other side. 
D) As long as one side implements free trade,it is always better for the other side to do so as well; so the key to getting mutual free trade is to assure the other side of your intentions. 
A) While mutual free trade is better than mutual protection for both countries,each country may have an incentive to unilaterally impose protection if they care more about producers than consumers. 
B) Trade negotiations often hold other elements of diplomacy "hostage" while they are ongoing. 
C) If all sides in the negotiations reveal all of the information about their industrial capabilities and production plans,specialization can more easily occur,but both sides also have an incentive to keep quiet and use their industrial secrets to exploit the other side. 
D) As long as one side implements free trade,it is always better for the other side to do so as well; so the key to getting mutual free trade is to assure the other side of your intentions.

Question 11

Why can one often ignore the effect of trade on consumers when analyzing the politics of trade?

Accepted Answer

A) Trade has no effect on consumers. 
B) The number of consumers hurt by trade is exactly offset by the number of consumers helped by trade. 
C) Consumers are a large group and the effect of trade on them is dispersed,so they are more likely to suffer collective action problems. 
D) Consumers are allied with labor in developing countries and with capital in developed countries,so we only need to focus on the effect of trade on these factors rather than consumers themselves. 
A) Trade has no effect on consumers. 
B) The number of consumers hurt by trade is exactly offset by the number of consumers helped by trade. 
C) Consumers are a large group and the effect of trade on them is dispersed,so they are more likely to suffer collective action problems. 
D) Consumers are allied with labor in developing countries and with capital in developed countries,so we only need to focus on the effect of trade on these factors rather than consumers themselves.

Question 12

What is trade liberalization?

Accepted Answer

A) Being tolerant of exporting to other countries 
B) Strengthening government oversight of imports 
C) Reducing barriers to trade between countries 
D) Imposing controls on the free flow of goods 
A) Being tolerant of exporting to other countries 
B) Strengthening government oversight of imports 
C) Reducing barriers to trade between countries 
D) Imposing controls on the free flow of goods

Question 13

Which of the following is a quota?

Accepted Answer

A) A toll on land and sea traffic entering a country 
B) A ban on imports from another country 
C) A limit to the amount of a foreign good that can be sold in a country 
D) A tax on imports levied at the border,paid by the importer 
A) A toll on land and sea traffic entering a country 
B) A ban on imports from another country 
C) A limit to the amount of a foreign good that can be sold in a country 
D) A tax on imports levied at the border,paid by the importer

Question 14

In which of the following scenarios does the United States have a comparative advantage in iron production?

Accepted Answer

A) A U.S.worker can produce 10 tons of iron or 5 bushels of wheat,while a British worker can produce 1 ton of iron or 1 bushel of wheat. 
B) A U.S.worker can produce 10 tons of iron or 5 bushels of wheat,while a British worker can produce 20 tons of iron or 10 bushels of wheat. 
C) A U.S.worker can produce 10 tons of iron or 5 bushels of wheat,while a British worker can produce 5 tons of iron or 1 bushel of wheat. 
D) A U.S.worker can produce 10 tons of iron or 5 bushels of wheat,while a British worker can produce 2 tons of iron or 1 bushel of wheat. 
A) A U.S.worker can produce 10 tons of iron or 5 bushels of wheat,while a British worker can produce 1 ton of iron or 1 bushel of wheat. 
B) A U.S.worker can produce 10 tons of iron or 5 bushels of wheat,while a British worker can produce 20 tons of iron or 10 bushels of wheat. 
C) A U.S.worker can produce 10 tons of iron or 5 bushels of wheat,while a British worker can produce 5 tons of iron or 1 bushel of wheat. 
D) A U.S.worker can produce 10 tons of iron or 5 bushels of wheat,while a British worker can produce 2 tons of iron or 1 bushel of wheat.

Question 15

Given the following exports,which of these is most likely a rich,developed country?

Accepted Answer

A) A country that exports shoes 
B) A country that exports computer chips 
C) A country that exports copper 
D) A country that exports oil 
A) A country that exports shoes 
B) A country that exports computer chips 
C) A country that exports copper 
D) A country that exports oil

Question 16

Line Qd ᵗ to Qd represents what occurring under the tariff in the figure?

Accepted Answer

A) Increased revenue for the state 
B) The new price of the good within the state 
C) How much of the good that will be imported by the state 
D) How much less the consumers would demand when compared to the world price 
A) Increased revenue for the state 
B) The new price of the good within the state 
C) How much of the good that will be imported by the state 
D) How much less the consumers would demand when compared to the world price

Question 17

Which of the following statements about trade policy is true?

Accepted Answer

A) No country in the world currently maintains trade barriers. 
B) Few countries in the world maintain trade barriers. 
C) A bare majority of countries in the world maintain some trade barriers. 
D) Every country in the world maintains some trade barriers. 
A) No country in the world currently maintains trade barriers. 
B) Few countries in the world maintain trade barriers. 
C) A bare majority of countries in the world maintain some trade barriers. 
D) Every country in the world maintains some trade barriers.

Question 18

How do strategic interactions create problems in international trade policy,and how might these problems be resolved?

Accepted Answer

Answers will vary.Students should focus

Question 19

Which country has a comparative advantage in cloth in the table?

Accepted Answer

A) Portugal 
B) England 
C) Neither country 
D) Both countries 
A) Portugal 
B) England 
C) Neither country 
D) Both countries

Question 20

Line Qₛ to Qd in the figure represents what occurring under liberalization?

Accepted Answer

A) The new price of the good within the state 
B) How much of the good consumers will demand 
C) How much of the good will be imported by the state 
D) How much domestic firms will produce for domestic consumption 
A) The new price of the good within the state 
B) How much of the good consumers will demand 
C) How much of the good will be imported by the state 
D) How much domestic firms will produce for domestic consumption

The General Agreement on Tariffs and Trade (GATT)was replaced by which of the following organizations?

What is most-favored-nation trading status?

Which of the following is an example of specialization and division of labor?

Why have the United States and other developed countries become less supportive of trade recently? What effect has this decreased support had (or will it likely have in the future)?

What is the theory of hegemonic stability?

Which of the following is explained well by the Stolper-Samuelson theorem?

What is true of a state that adopts a tariff in the scenario depicted in the figure?

Which of the following is most likely to benefit from protectionism?

What is "dumping"?

Why can trade negotiations between two countries be viewed as a Prisoner's Dilemma?

Why can one often ignore the effect of trade on consumers when analyzing the politics of trade?

What is trade liberalization?

Which of the following is a quota?

In which of the following scenarios does the United States have a comparative advantage in iron production?

Given the following exports,which of these is most likely a rich,developed country?

Line Q_d ᵗ to Q_d represents what occurring under the tariff in the figure?

Which of the following statements about trade policy is true?

How do strategic interactions create problems in international trade policy,and how might these problems be resolved?

Which country has a comparative advantage in cloth in the table?

Line Qₛ to Q_d in the figure represents what occurring under liberalization?

What Shaped Our World

Understanding Interests, interactions, and Institutions

Why Are There Wars

Domestic Politics and War

International Institutions and War

Violence by Nonstate Actors: Civil War and Terrorism

International Financial Relations

International Monetary Relations

Development: Causes of the Wealth and Poverty of Nations

International Law and Norms

Human Rights

The Global Environment

The Future of International Politics

Introduction

Foundations, War, and Peace

International Political Economy, Transnational Politics, and Looking Ahead

Filters

Exam 7: International Trade

The General Agreement on Tariffs and Trade (GATT)was replaced by which of the following organizations?

What is most-favored-nation trading status?

Which of the following is an example of specialization and division of labor?

Why have the United States and other developed countries become less supportive of trade recently? What effect has this decreased support had (or will it likely have in the future)?

What is the theory of hegemonic stability?

Which of the following is explained well by the Stolper-Samuelson theorem?

What is true of a state that adopts a tariff in the scenario depicted in the figure?

Which of the following is most likely to benefit from protectionism?

What is "dumping"?

Why can trade negotiations between two countries be viewed as a Prisoner's Dilemma?

Why can one often ignore the effect of trade on consumers when analyzing the politics of trade?

What is trade liberalization?

Which of the following is a quota?

In which of the following scenarios does the United States have a comparative advantage in iron production?

Given the following exports,which of these is most likely a rich,developed country?

Line Qd ᵗ to Qd represents what occurring under the tariff in the figure?

Which of the following statements about trade policy is true?

How do strategic interactions create problems in international trade policy,and how might these problems be resolved?

Which country has a comparative advantage in cloth in the table?

Line Qₛ to Qd in the figure represents what occurring under liberalization?

What Shaped Our World

Understanding Interests, interactions, and Institutions

Why Are There Wars

Domestic Politics and War

International Institutions and War

Violence by Nonstate Actors: Civil War and Terrorism

International Financial Relations

International Monetary Relations

Development: Causes of the Wealth and Poverty of Nations

International Law and Norms

Human Rights

The Global Environment

The Future of International Politics

Introduction

Foundations, War, and Peace

International Political Economy, Transnational Politics, and Looking Ahead

Filters

Line Q_d ᵗ to Q_d represents what occurring under the tariff in the figure?

Line Qₛ to Q_d in the figure represents what occurring under liberalization?