Exam 5: Trade Protectionism

Voluntary export restraints have been used mainly in areas such as textiles, automobiles, and steel and are intended to:

____________________ establish a low tariff level on an initial quantity of the product being imported into the country but beyond an initial volume the tariff rate imposed on additional quantities imported escalates markedly.

Which is NOT a form of government export promotion?

What is meant by the employment argument which is used by some national governments to justify protecting certain domestic industries? Provide a real world example to illustrate your answer.

According to transaction cost analysis, firms seek to minimize transaction costs in their efforts to expand and market their products globally. These may be classified as Contracting costs, Search costs, Monitoring Costs and Enforcement costs.

Unlike the International Product Cycle Theory, Porter's Diamond of National Advantage suggests that countries can maintain their competitive advantage in specific industries over long periods of time irrespective of the impact of labor costs.

Based on the Heckscher-Ohlin model why would you expect a country such as India to export hand-made carpets while a country such as Germany would be expected to import these products?

The Mexican ambassador to Canada knew exactly why he was being asked to attend a meeting in Ottawa. Mexican vegetable farmers were rumored to be subsidized by their government. Canadian farmers in British Columbia and Ontario (two Canadian provinces) had complained to the Canadian government calling for the imposition of ________________ on Mexican imports. The Mexican ambassador knew that if he was not careful in discussions with trade officials in Ottawa the matter could soon be before the World Trade Organization.

According to the International Product Cycle Theory comparative advantage shifts to developing countries such as Mexico, India and China in the _________ stage of the cycle.

What is meant by the infant industry argument which is used by some national governments to justify protecting certain domestic industries?

What are the roles of the Bretton Woods institutions?

According to Dunning's OLI Framework a firm's foreign investment decisions are driven by:

Tariffs and quotas are both measures used by national governments to protect domestic industries. What is the difference between a tariff and a quota?

The ___________ theory attempts to explain international trade by examining the pattern of consumer demand for products.