Question 1

A beggar-thy-neighbor policy is the imposition of:

Accepted Answer

A)  Free trade to increase domestic productivity 
B)  Trade barriers to increase domestic demand and employment 
C)  Import tariffs to curb domestic inflation 
D)  Revenue tariffs to make products cheaper for domestic consumers 
A)  Free trade to increase domestic productivity 
B)  Trade barriers to increase domestic demand and employment 
C)  Import tariffs to curb domestic inflation 
D)  Revenue tariffs to make products cheaper for domestic consumers

Question 2

Figure 4.2.Import Tariff Levied by a "Large" Country  
-Consider Figure 4.2.Suppose the United States imposes a tariff of $100 on each ton of steel imported.With the tariff,the price of steel rises to $____ and imports fall to ____ tons.

Accepted Answer

A)  $550,20 tons 
B)  $550,30 tons 
C)  $575,20 tons 
D)  $575,30 tons 
A)  $550,20 tons 
B)  $550,30 tons 
C)  $575,20 tons 
D)  $575,30 tons

Question 3

According to the infant-industry argument,temporary tariff protection granted to an infant industry will help it become competitive in the world market; when international competitiveness is achieved,the tariff should be removed.

Accepted Answer

A) True 
 B)False

Question 4

If a "large" country levies a tariff on an imported good,its overall welfare increases if the monetary value of the tariff's consumption effect plus protective effect exceeds the monetary value of the terms-of-trade effect.

Accepted Answer

A) True 
 B)False

Question 5

Free traders point out that:

Accepted Answer

A)  There is usually an efficiency gain from having tariffs 
B)  There is usually an efficiency loss from having tariffs 
C)  Producers lose from tariffs at the expense of consumers 
D)  Producers lose from tariffs at the expense of the government 
A)  There is usually an efficiency gain from having tariffs 
B)  There is usually an efficiency loss from having tariffs 
C)  Producers lose from tariffs at the expense of consumers 
D)  Producers lose from tariffs at the expense of the government

Question 6

Arguments for U.S.trade restrictions include all of the following except

Accepted Answer

A)  Job protection 
B)  Infant industry support 
C)  Maintenance of domestic living standard 
D)  Improving incomes for developing countries 
A)  Job protection 
B)  Infant industry support 
C)  Maintenance of domestic living standard 
D)  Improving incomes for developing countries

Question 7

-Consider Table 4.1.After the tariff,domestic value added equals:

Accepted Answer

A)  $25 
B)  $50 
C)  $75 
D)  $100 
A)  $25 
B)  $50 
C)  $75 
D)  $100

Question 8

Figure 4.1 illustrates the demand and supply schedules for pocket calculators in Mexico,a "small" nation that is unable to affect the world price.
Figure 4.1.Import Tariff Levied by a "Small" Country  
-Consider Figure 4.1.In the absence of trade,Mexico produces and consumes:

Accepted Answer

A)  10 calculators 
B)  40 calculators 
C)  60 calculators 
D)  80 calculators 
A)  10 calculators 
B)  40 calculators 
C)  60 calculators 
D)  80 calculators

Question 9

For a "large" country,a tariff on an imported product may be partially absorbed by the domestic consumer via a higher purchase price and partially absorbed by the foreign producer via a lower export price.

Accepted Answer

A) True 
 B)False

Question 10

Refer to Exhibit 4.2.The tariff's revenue effect equals $6,000.

Accepted Answer

A) True 
 B)False

Question 11

Developing nations often maintain that industrial countries permit raw materials to be imported at very low tariff rates while maintaining high tariff rates on manufactured imports.Which of the following refers to the above statement?

Accepted Answer

A)  Tariff-quota effect 
B)  Nominal tariff effect 
C)  Tariff escalation effect 
D)  Protective tariff effect 
A)  Tariff-quota effect 
B)  Nominal tariff effect 
C)  Tariff escalation effect 
D)  Protective tariff effect

Question 12

Which type of tariff is not used by the American government?

Accepted Answer

A)  Import tariff 
B)  Export tariff 
C)  Specific tariff 
D)  Ad valorem tariff 
A)  Import tariff 
B)  Export tariff 
C)  Specific tariff 
D)  Ad valorem tariff

Question 13

Of the many arguments in favor of tariffs,the one that has enjoyed the most significant economic justification has been the:

Accepted Answer

A)  Infant industry argument 
B)  Cheap foreign labor argument 
C)  Balance of payments argument 
D)  Domestic living standard argument 
A)  Infant industry argument 
B)  Cheap foreign labor argument 
C)  Balance of payments argument 
D)  Domestic living standard argument

Question 14

Relatively low wages in Mexico make it impossible for U.S.manufacturers of labor-intensive goods to compete against Mexican manufacturers.

Accepted Answer

A) True 
 B)False

Question 15

Assume that the United States imports VCRs from South Korea at a price of $200 per unit and that these VCRs are subject to an import tariff of 20 percent.Also assume that U.S.components are used in the VCRs assembled by South Korea and that these components have a value of $100.Under the Offshore Assembly Provision of U.S.tariff policy,the price of an imported VCR to the U.S.consumer after the tariff has been levied is $220.

Accepted Answer

A) True 
 B)False

Question 16

Changes in a "large" country's economic conditions or trade policies can affect the terms at which it trades with other countries.

Accepted Answer

A) True 
 B)False

Question 17

Figure 4.2.Import Tariff Levied by a "Large" Country  
-According to Figure 4.2,the tariff leads to the overall welfare of the United States:

Accepted Answer

A)  Rising by $250 
B)  Rising by $500 
C)  Falling by $250 
D)  Falling by $500 
A)  Rising by $250 
B)  Rising by $500 
C)  Falling by $250 
D)  Falling by $500

Question 18

When a government allows raw materials and other intermediate products to enter a country duty free,its tariff policy generally results in a:

Accepted Answer

A)  Effective tariff rate less than the nominal tariff rate 
B)  Nominal tariff rate less than the effective tariff rate 
C)  Rise in both nominal and effective tariff rates 
D)  Fall in both nominal and effective tariff rates 
A)  Effective tariff rate less than the nominal tariff rate 
B)  Nominal tariff rate less than the effective tariff rate 
C)  Rise in both nominal and effective tariff rates 
D)  Fall in both nominal and effective tariff rates

Question 19

If we consider the interests of both consumers and producers,then a policy of tariff reduction in the U.S.auto industry is:

Accepted Answer

A)  In the interest of the United States as a whole,but not in the interest of auto-producing states 
B)  In the interest of the United States as a whole,and in the interest of auto-producing states 
C)  Not in the interest of the United States as a whole,nor in the interest of auto-producing states 
D)  Not in the interest of the United States as a whole,but is in the interest of auto-producing states 
A)  In the interest of the United States as a whole,but not in the interest of auto-producing states 
B)  In the interest of the United States as a whole,and in the interest of auto-producing states 
C)  Not in the interest of the United States as a whole,nor in the interest of auto-producing states 
D)  Not in the interest of the United States as a whole,but is in the interest of auto-producing states

Question 20

When the production of a commodity does not utilize imported inputs,the effective tariff rate on the commodity:

Accepted Answer

A)  Exceeds the nominal tariff rate on the commodity 
B)  Equals the nominal tariff rate on the commodity 
C)  Is less than the nominal tariff rate on the commodity 
D)  None of the above 
A)  Exceeds the nominal tariff rate on the commodity 
B)  Equals the nominal tariff rate on the commodity 
C)  Is less than the nominal tariff rate on the commodity 
D)  None of the above

A beggar-thy-neighbor policy is the imposition of:

Figure 4.2.Import Tariff Levied by a "Large" Country -Consider Figure 4.2.Suppose the United States imposes a tariff of $100 on each ton of steel imported.With the tariff,the price of steel rises to $ and imports fall to tons.

According to the infant-industry argument,temporary tariff protection granted to an infant industry will help it become competitive in the world market; when international competitiveness is achieved,the tariff should be removed.

If a "large" country levies a tariff on an imported good,its overall welfare increases if the monetary value of the tariff's consumption effect plus protective effect exceeds the monetary value of the terms-of-trade effect.

Free traders point out that:

Arguments for U.S.trade restrictions include all of the following except

-Consider Table 4.1.After the tariff,domestic value added equals:

Figure 4.1 illustrates the demand and supply schedules for pocket calculators in Mexico,a "small" nation that is unable to affect the world price. Figure 4.1.Import Tariff Levied by a "Small" Country -Consider Figure 4.1.In the absence of trade,Mexico produces and consumes:

For a "large" country,a tariff on an imported product may be partially absorbed by the domestic consumer via a higher purchase price and partially absorbed by the foreign producer via a lower export price.

Refer to Exhibit 4.2.The tariff's revenue effect equals $6,000.

Developing nations often maintain that industrial countries permit raw materials to be imported at very low tariff rates while maintaining high tariff rates on manufactured imports.Which of the following refers to the above statement?

Which type of tariff is not used by the American government?

Of the many arguments in favor of tariffs,the one that has enjoyed the most significant economic justification has been the:

Relatively low wages in Mexico make it impossible for U.S.manufacturers of labor-intensive goods to compete against Mexican manufacturers.

Changes in a "large" country's economic conditions or trade policies can affect the terms at which it trades with other countries.

Figure 4.2.Import Tariff Levied by a "Large" Country -According to Figure 4.2,the tariff leads to the overall welfare of the United States:

When a government allows raw materials and other intermediate products to enter a country duty free,its tariff policy generally results in a:

If we consider the interests of both consumers and producers,then a policy of tariff reduction in the U.S.auto industry is:

When the production of a commodity does not utilize imported inputs,the effective tariff rate on the commodity:

The International Economy and Globalization

Foundations of Modern Trade Theory: Comparative Advantage

Sources of Comparative Advantage

Nontariff Trade Barriers

Trade Regulations and Industrial Policies

Trade Policies for the Developing Nations

Regional Trading Arrangements

International Factor Movements and Multinational Enterprises

The Balance of Payments

Foreign Exchange

Exchange-Rate Determination

Mechanisms of International Adjustment

Exchange-Rate Adjustments and the Balance of Payments

Exchange-Rate Systems and Currency Crises

Macroeconomic Policy in an Open Economy

International Banking: Reserves, Debt, and Risk

Filters

Exam 4: Tariffs

A beggar-thy-neighbor policy is the imposition of:

Figure 4.2.Import Tariff Levied by a "Large" Country -Consider Figure 4.2.Suppose the United States imposes a tariff of $100 on each ton of steel imported.With the tariff,the price of steel rises to $____ and imports fall to ____ tons.

According to the infant-industry argument,temporary tariff protection granted to an infant industry will help it become competitive in the world market; when international competitiveness is achieved,the tariff should be removed.

If a "large" country levies a tariff on an imported good,its overall welfare increases if the monetary value of the tariff's consumption effect plus protective effect exceeds the monetary value of the terms-of-trade effect.

Free traders point out that:

Arguments for U.S.trade restrictions include all of the following except

-Consider Table 4.1.After the tariff,domestic value added equals:

Figure 4.1 illustrates the demand and supply schedules for pocket calculators in Mexico,a "small" nation that is unable to affect the world price. Figure 4.1.Import Tariff Levied by a "Small" Country -Consider Figure 4.1.In the absence of trade,Mexico produces and consumes:

For a "large" country,a tariff on an imported product may be partially absorbed by the domestic consumer via a higher purchase price and partially absorbed by the foreign producer via a lower export price.

Refer to Exhibit 4.2.The tariff's revenue effect equals $6,000.

Developing nations often maintain that industrial countries permit raw materials to be imported at very low tariff rates while maintaining high tariff rates on manufactured imports.Which of the following refers to the above statement?

Which type of tariff is not used by the American government?

Of the many arguments in favor of tariffs,the one that has enjoyed the most significant economic justification has been the:

Relatively low wages in Mexico make it impossible for U.S.manufacturers of labor-intensive goods to compete against Mexican manufacturers.

Changes in a "large" country's economic conditions or trade policies can affect the terms at which it trades with other countries.

Figure 4.2.Import Tariff Levied by a "Large" Country -According to Figure 4.2,the tariff leads to the overall welfare of the United States:

When a government allows raw materials and other intermediate products to enter a country duty free,its tariff policy generally results in a:

If we consider the interests of both consumers and producers,then a policy of tariff reduction in the U.S.auto industry is:

When the production of a commodity does not utilize imported inputs,the effective tariff rate on the commodity:

The International Economy and Globalization

Foundations of Modern Trade Theory: Comparative Advantage

Sources of Comparative Advantage

Nontariff Trade Barriers

Trade Regulations and Industrial Policies

Trade Policies for the Developing Nations

Regional Trading Arrangements

International Factor Movements and Multinational Enterprises

The Balance of Payments

Foreign Exchange

Exchange-Rate Determination

Mechanisms of International Adjustment

Exchange-Rate Adjustments and the Balance of Payments

Exchange-Rate Systems and Currency Crises

Macroeconomic Policy in an Open Economy

International Banking: Reserves, Debt, and Risk

Filters

Figure 4.2.Import Tariff Levied by a "Large" Country -Consider Figure 4.2.Suppose the United States imposes a tariff of $100 on each ton of steel imported.With the tariff,the price of steel rises to $ and imports fall to tons.