Question 1

Compare and contrast import quotas and voluntary export restraints.

Accepted Answer

An import quota is a direct restriction on the quantity of some good that may be imported into a country. The restriction is normally enforced by issuing import licenses to a group of individuals or firms. In contrast, a voluntary export restraint (VER) is a quota on trade imposed by the exporting country, typically at the request of the importing country's government. Foreign producers agree to VERs because they fear more damaging punitive tariffs or import quotas might follow if they do not. Both import quotas and VERs benefit domestic producers, but hurt consumers through higher prices.

Question 2

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 C

Question 3

Tariffs are unambiguously pro-consumer and anti-producer.

Accepted Answer

A) True 
 B)False  False

Question 4

Local content regulations:

Accepted Answer

A)  protect domestic producers by limiting foreign competition. 
B)  lower the prices of imported components. 
C)  tend to benefit consumers and not producers. 
D)  encourage outsourcing of production units. 
A)  protect domestic producers by limiting foreign competition. 
B)  lower the prices of imported components. 
C)  tend to benefit consumers and not producers. 
D)  encourage outsourcing of production units.

Question 5

The Japanese government was pressurized by the U.S. government to place limits on the number of vehicles exported to the United States by Japanese automobile producers in 1981. This is an example of:

Accepted Answer

A)  tariff rate quota. 
B)  specific tariffs. 
C)  voluntary export restraint. 
D)  ad valorem tariff. 
A)  tariff rate quota. 
B)  specific tariffs. 
C)  voluntary export restraint. 
D)  ad valorem tariff.

Question 6

The WTO has the ability to force any member nation to take an action to which it is opposed.

Accepted Answer

A) True 
 B)False

Question 7

Discuss the infant industry argument for intervention in markets. What is GATT's position on the argument?

Accepted Answer

Alexander Hamilton proposed the infant i

Question 8

Business firms that lobby their governments to engage in protectionism have an opportunity to build a(n) _____ by constructing a globally dispersed production system.

Accepted Answer

A)  absolute advantage 
B)  competitive advantage 
C)  strategic trade advantage 
D)  comparative advantage 
A)  absolute advantage 
B)  competitive advantage 
C)  strategic trade advantage 
D)  comparative advantage

Question 9

Which of the following observations about subsidies is true?

Accepted Answer

A)  Government subsidies must be paid for, typically by taxing individuals and corporations. 
B)  Subsidies are used to reduce exports from a sector, often for political reasons. 
C)  Whether subsidies generate national benefits that exceed their national costs is debatable. 
D)  Subsidies help foreign producers gain a competitive advantage over domestic producers. 
A)  Government subsidies must be paid for, typically by taxing individuals and corporations. 
B)  Subsidies are used to reduce exports from a sector, often for political reasons. 
C)  Whether subsidies generate national benefits that exceed their national costs is debatable. 
D)  Subsidies help foreign producers gain a competitive advantage over domestic producers.

Question 10

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

Accepted Answer

A)  benefit the multination 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 multination 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 11

The Smoot-Hawley Act aimed at:

Accepted Answer

A)  diverting consumer demand toward foreign products. 
B)  promoting unrestricted free trade. 
C)  limiting global warming. 
D)  avoiding rising unemployment. 
A)  diverting consumer demand toward foreign products. 
B)  promoting unrestricted free trade. 
C)  limiting global warming. 
D)  avoiding rising unemployment.

Question 12

TRIPS regulations oblige WTO members to do which of the following?

Accepted Answer

A)  grant and enforce patents lasting at least 100 years. 
B)  grant and enforce copyrights lasting 100 years. 
C)  comply with the rules within five years in the case of the rich countries. 
D)  comply with the rules within 10 years in the case of the poorest countries. 
A)  grant and enforce patents lasting at least 100 years. 
B)  grant and enforce copyrights lasting 100 years. 
C)  comply with the rules within five years in the case of the rich countries. 
D)  comply with the rules within 10 years in the case of the poorest countries.

Question 13

The WTO argues that removing tariff barriers and subsidies in the agricultural sector could:

Accepted Answer

A)  protect domestic agriculture in developed nations. 
B)  lower the overall level of agricultural trade. 
C)  restrict global economic growth. 
D)  lower prices to consumers. 
A)  protect domestic agriculture in developed nations. 
B)  lower the overall level of agricultural trade. 
C)  restrict global economic growth. 
D)  lower prices to consumers.

Question 14

The U.S. government has used the threat of punitive trade sanctions to try to get the Chinese government to enforce its intellectual property laws. This is an example of government intervention based on:

Accepted Answer

A)  human rights protection. 
B)  national security. 
C)  consumer protection. 
D)  retaliation. 
A)  human rights protection. 
B)  national security. 
C)  consumer protection. 
D)  retaliation.

Question 15

In the United States, the only firms allowed to import cheese are certain trading companies, each of which is allocated the right to import a maximum number of pounds of cheese each year. This is an example of _____.

Accepted Answer

A)  a subsidy 
B)  an import quota 
C)  a local content requirement 
D)  an ad valorem tariff 
A)  a subsidy 
B)  an import quota 
C)  a local content requirement 
D)  an ad valorem tariff

Question 16

Tariffs do not benefit _____.

Accepted Answer

A)  consumers 
B)  domestic producers 
C)  governments 
D)  domestic firms 
A)  consumers 
B)  domestic producers 
C)  governments 
D)  domestic firms

Question 17

Inadequate protections for intellectual property:

Accepted Answer

A)  increase the incentive for innovation. 
B)  led to the Smooth-Hawley Act. 
C)  reduce the incentive for innovation. 
D)  are one of the issues addressed by the local content requirement. 
A)  increase the incentive for innovation. 
B)  led to the Smooth-Hawley Act. 
C)  reduce the incentive for innovation. 
D)  are one of the issues addressed by the local content requirement.

Question 18

Specific tariffs are:

Accepted Answer

A)  levied as a proportion of the value of the imported good. 
B)  government payment to domestic producers. 
C)  in the form of manufacturing or production requirements of goods. 
D)  levied as a fixed charge for each unit of a good imported. 
A)  levied as a proportion of the value of the imported good. 
B)  government payment to domestic producers. 
C)  in the form of manufacturing or production requirements of goods. 
D)  levied as a fixed charge for each unit of a good imported.

Question 19

A key issue in the "millennium round" of the WTO was to:

Accepted Answer

A)  increase barriers to cross-border trade in agricultural products. 
B)  extend GATT to cover trade in commodities. 
C)  further reduce barriers to cross-border trade and investment. 
D)  extend GATT rules to cover trade in services. 
A)  increase barriers to cross-border trade in agricultural products. 
B)  extend GATT to cover trade in commodities. 
C)  further reduce barriers to cross-border trade and investment. 
D)  extend GATT rules to cover trade in services.

Question 20

The World Trade Organization was created as part of the Uruguay Round.

Accepted Answer

A) True 
 B)False

Compare and contrast import quotas and voluntary export restraints.

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

Tariffs are unambiguously pro-consumer and anti-producer.

Local content regulations:

The Japanese government was pressurized by the U.S. government to place limits on the number of vehicles exported to the United States by Japanese automobile producers in 1981. This is an example of:

The WTO has the ability to force any member nation to take an action to which it is opposed.

Discuss the infant industry argument for intervention in markets. What is GATT's position on the argument?

Business firms that lobby their governments to engage in protectionism have an opportunity to build a(n) _____ by constructing a globally dispersed production system.

Which of the following observations about subsidies is true?

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

The Smoot-Hawley Act aimed at:

TRIPS regulations oblige WTO members to do which of the following?

The WTO argues that removing tariff barriers and subsidies in the agricultural sector could:

The U.S. government has used the threat of punitive trade sanctions to try to get the Chinese government to enforce its intellectual property laws. This is an example of government intervention based on:

In the United States, the only firms allowed to import cheese are certain trading companies, each of which is allocated the right to import a maximum number of pounds of cheese each year. This is an example of _____.

Tariffs do not benefit _____.

Inadequate protections for intellectual property:

Specific tariffs are:

A key issue in the "millennium round" of the WTO was to:

The World Trade Organization was created as part of the Uruguay Round.

Globalization

National Differences in Political Economy, and Legal Systems

National Differences in Economic Development

Differences in Culture

Ethics, Corporate Social Responsibility, and Sustainability

International Trade Theory

Foreign Direct Investment

Regional Trade Pacts Give the Mexican Auto Industry an Edge

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 RD

Global Human Resource Management

Accounting and Finance in the International Business

Filters

Exam 7: Government Policy and International Trade

Compare and contrast import quotas and voluntary export restraints.

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

Tariffs are unambiguously pro-consumer and anti-producer.

Local content regulations:

The Japanese government was pressurized by the U.S. government to place limits on the number of vehicles exported to the United States by Japanese automobile producers in 1981. This is an example of:

The WTO has the ability to force any member nation to take an action to which it is opposed.

Discuss the infant industry argument for intervention in markets. What is GATT's position on the argument?

Business firms that lobby their governments to engage in protectionism have an opportunity to build a(n) _____ by constructing a globally dispersed production system.

Which of the following observations about subsidies is true?

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

The Smoot-Hawley Act aimed at:

TRIPS regulations oblige WTO members to do which of the following?

The WTO argues that removing tariff barriers and subsidies in the agricultural sector could:

The U.S. government has used the threat of punitive trade sanctions to try to get the Chinese government to enforce its intellectual property laws. This is an example of government intervention based on:

In the United States, the only firms allowed to import cheese are certain trading companies, each of which is allocated the right to import a maximum number of pounds of cheese each year. This is an example of _____.

Tariffs do not benefit _____.

Inadequate protections for intellectual property:

Specific tariffs are:

A key issue in the "millennium round" of the WTO was to:

The World Trade Organization was created as part of the Uruguay Round.

Globalization

National Differences in Political Economy, and Legal Systems

National Differences in Economic Development

Differences in Culture

Ethics, Corporate Social Responsibility, and Sustainability

International Trade Theory

Foreign Direct Investment

Regional Trade Pacts Give the Mexican Auto Industry an Edge

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 RD

Global Human Resource Management

Accounting and Finance in the International Business

Filters