Question 1

The Reciprocal Trade Agreements Act of 1934 allowed the President to lower tariffs by up to _____ of the existing level,subject to a tariff reductions by our trading partner

Accepted Answer

A)  15 percent 
B)  35 percent 
C)  50 percent 
D)  75 percent

Question 2

Although the Uruguay Round of multilateral trade negotiations succeeded in reducing nontariff trade barriers,it could not achieve reductions in tariff trade barriers.

Accepted Answer

A) True 
 B)False

Question 3

The main focus of the Uruguay Round of multilateral trade negotiations was on tariff barriers rather than nontariff trade barriers.

Accepted Answer

A) True 
 B)False

Question 4

Assume that trade restrictions are adopted by a country.The World Trade Organization would generally prefer a tariff to a quota because a tariff is more easily seen and its trade effects are more easily determined.

Accepted Answer

A) True 
 B)False

Question 5

For the United States in the early 1800s

Accepted Answer

A)  Northern manufacturers favored high tariffs while Southern farmers opposed them 
B)  Southern farmers favored high tariffs while northern manufacturers opposed them 
C)  High tariffs were favored by Northern manufacturers and Southern farmers 
D)  Low tariffs were favored by Northern manufacturers and Southern farmers

Question 6

According to the Reciprocal Trade Agreements Act of 1934,the President could lower tariffs by up to 10 percent of the existing level without congressional approval.

Accepted Answer

A) True 
 B)False

Question 7

In 1990 the United States and its allies imposed trade embargoes on exports/imports to/from Iraq in response to its invasion of Kuwait.The embargoes would induce smaller losses in Iraq's consumer surplus the:

Accepted Answer

A)  Lesser its initial dependence on foreign products 
B)  Less elastic Iraq's demand schedule 
C)  Lesser the available output from alternative suppliers 
D)  More inelastic Iraq's supply schedule

Question 8

The strategic-trade-policy hypothesis assumes that domestic firms operate under increasing cost conditions as well as in perfectly competitive markets.

Accepted Answer

A) True 
 B)False

Question 9

The purpose of the U.S.Trade Adjustment Assistance Program is to

Accepted Answer

A)  provide production subsidies to American exporting companies 
B)  protect American jobs and wages by imposing import tariffs and quotas 
C)  provide benefits to American workers who are dislocated because of international trade 
D)  provide price supports for American farmers harmed by international trade

Question 10

The principle of normal trade relations (most-favored-nation)treatment was established with the passage of the:

Accepted Answer

A)  Fordney-McCumber Act of 1922 
B)  Smoot-Hawley Act of 1930 
C)  Reciprocal Trade Agreements Act of 1934 
D)  Trade Act of 1974

Question 11

If fast track authority is approved and trade negotiations are completed,Congress must vote on the agreement (without amendment) within 90 legislative days of submission.

Accepted Answer

A) True 
 B)False

Question 12

Soon after the United States implemented the Smoot Hawley Tariff Act of 1930

Accepted Answer

A)  the volume of international trade dramatically increased 
B)  employment in the United States rapidly increased 
C)  about 25 countries levied import tariffs on U.S,products 
D)  the world returned to a policy of free trade

Question 13

Advocates of the U.S.Trade Adjustment Assistance Program argue that it allows American farmers to maintain prices that are higher than that which would occur under free trade.

Accepted Answer

A) True 
 B)False

Question 14

Proponents of the Smoot-Hawley Act of 1930 viewed it as a means of combating domestic unemployment.

Accepted Answer

A) True 
 B)False

Question 15

Under the World Trade Organization,when countries agree to open their markets for goods or services,they will "bind" their commitments.These bindings amount to ceilings on import tariff rates.

Accepted Answer

A) True 
 B)False

Question 16

Normal trade relations (the most favored nation clause) tends to result in discriminatory treatment regarding tariff reductions among nations.

Accepted Answer

A) True 
 B)False

Question 17

Critics of the World Trade Organization maintain that liberalized trade can result in

Accepted Answer

A)  environmental degradation 
B)  lower wages paid to workers 
C)  business firms avoiding labor protections such as workplace safety 
D)  all of the above

Question 18

According to U.S.trade law,trade restrictions can be imposed against both unfairly and fairly traded foreign goods.

Accepted Answer

A) True 
 B)False

Question 19

Section 301 of the Trade Act of 1974 emphasized

Accepted Answer

A)  the use of strategic trade policy 
B)  the welfare effects of export subsidies 
C)  relatively low wage levels of developing countries 
D)  unfair trading practices of American trading partners

Question 20

Figure 6.2 illustrates the calculator market for Mexico,assumed to be a small nation that is unable influence the South Korean (world) price.Assume the South Korean price to be $60 per calculator.
Figure 6.2.Effects of an Export Subsidy
 
-Consider Figure 6.2.To help its firms further penetrate export markets,suppose the South Korean government provides them a production subsidy of $20 per calculator.With the subsidy,South Korean firms charge a price of $____ and export ____ calculators to Mexico.

Accepted Answer

A)  $40,8 
B)  $40,10 
C)  $20,8 
D)  $20,10

Exam 6: Trade Regulations and Industrial Policies

The Reciprocal Trade Agreements Act of 1934 allowed the President to lower tariffs by up to _____ of the existing level,subject to a tariff reductions by our trading partner

Although the Uruguay Round of multilateral trade negotiations succeeded in reducing nontariff trade barriers,it could not achieve reductions in tariff trade barriers.

The main focus of the Uruguay Round of multilateral trade negotiations was on tariff barriers rather than nontariff trade barriers.

Assume that trade restrictions are adopted by a country.The World Trade Organization would generally prefer a tariff to a quota because a tariff is more easily seen and its trade effects are more easily determined.

For the United States in the early 1800s

According to the Reciprocal Trade Agreements Act of 1934,the President could lower tariffs by up to 10 percent of the existing level without congressional approval.

In 1990 the United States and its allies imposed trade embargoes on exports/imports to/from Iraq in response to its invasion of Kuwait.The embargoes would induce smaller losses in Iraq's consumer surplus the:

The strategic-trade-policy hypothesis assumes that domestic firms operate under increasing cost conditions as well as in perfectly competitive markets.

The purpose of the U.S.Trade Adjustment Assistance Program is to

The principle of normal trade relations (most-favored-nation) treatment was established with the passage of the:

If fast track authority is approved and trade negotiations are completed,Congress must vote on the agreement (without amendment) within 90 legislative days of submission.

Soon after the United States implemented the Smoot Hawley Tariff Act of 1930

Advocates of the U.S.Trade Adjustment Assistance Program argue that it allows American farmers to maintain prices that are higher than that which would occur under free trade.

Proponents of the Smoot-Hawley Act of 1930 viewed it as a means of combating domestic unemployment.

Under the World Trade Organization,when countries agree to open their markets for goods or services,they will "bind" their commitments.These bindings amount to ceilings on import tariff rates.

Normal trade relations (the most favored nation clause) tends to result in discriminatory treatment regarding tariff reductions among nations.

Critics of the World Trade Organization maintain that liberalized trade can result in

According to U.S.trade law,trade restrictions can be imposed against both unfairly and fairly traded foreign goods.

Section 301 of the Trade Act of 1974 emphasized