Question 1

During the past four decades:

Accepted Answer

A)  Nontariff barriers (NTBs) and tariffs have increased in importance 
B)  NTBs and tariffs have decreased in importance 
C)  NTBs have increased and tariffs have decreased in importance 
D)  NTBs have decreased and tariffs have increased in importance

Question 2

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 3

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

Question 4

The World Trade Organization provides for all of the following except:

Accepted Answer

A)  The usage of the normal-trade-relation (most-favored-nation) clause 
B)  Assistance in the settlement of trade disagreements 
C)  Multilateral tariff reductions 
D)  Bilateral tariff reductions

Question 5

Explain how advocates of strategic trade policy differ from the classical free traders in their treatment of externalities?

Accepted Answer

The answer of Explain how advocates of strategic trade policy...

Question 6

The U.S. "trade-remedy laws" could establish all of the following $\underline {  \text { except }  }$:

Accepted Answer

A)  Import tariffs to protect U.S. firms seriously injured by foreign competition 
B)  Countervailing duties which neutralize foreign export subsidies 
C)  Antidumping duties which protect U.S. firms from imports sold at less-than-fair-value 
D)  Economic sanctions levied against hostile nations

Question 7

According to the strategic-trade-policy hypothesis, a subsidy granted to domestic exporters may lead to increased export profits which more than offset the cost of the subsidy to domestic taxpayers.

Accepted Answer

A) True 
 B)False

Question 8

Suppose the United States imposes trade sanctions (export quotas) on grain sold to the Russians. Assuming other nations do not increase grain exports to the Russians, all of the following would occur $\underline {  \text { except }  }$:

Accepted Answer

A)  Grain prices would rise in Russia 
B)  Consumer surplus would decrease for the Russians 
C)  Grain prices would rise in the United States 
D)  Export revenues would decrease for U.S. producers

Question 9

Under the provisions of the World Trade Organization, Canada would have the right to impose countervailing duties on imports of South Korean steel when the South Korean government provides export subsidies to its steelmakers.

Accepted Answer

A) True 
 B)False

Exam 6: Trade Regulations and Industrial Policies

During the past four decades:

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 World Trade Organization provides for all of the following except:

Explain how advocates of strategic trade policy differ from the classical free traders in their treatment of externalities?

The U.S. "trade-remedy laws" could establish all of the following $\underline { \text { except } }$ :

According to the strategic-trade-policy hypothesis, a subsidy granted to domestic exporters may lead to increased export profits which more than offset the cost of the subsidy to domestic taxpayers.

Suppose the United States imposes trade sanctions (export quotas) on grain sold to the Russians. Assuming other nations do not increase grain exports to the Russians, all of the following would occur $\underline { \text { except } }$ :

Under the provisions of the World Trade Organization, Canada would have the right to impose countervailing duties on imports of South Korean steel when the South Korean government provides export subsidies to its steelmakers.

Exam 6: Trade Regulations and Industrial Policies

During the past four decades:

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 World Trade Organization provides for all of the following except:

Explain how advocates of strategic trade policy differ from the classical free traders in their treatment of externalities?

The U.S. "trade-remedy laws" could establish all of the following except ‾\underline { \text { except } } except ​ :

According to the strategic-trade-policy hypothesis, a subsidy granted to domestic exporters may lead to increased export profits which more than offset the cost of the subsidy to domestic taxpayers.

Suppose the United States imposes trade sanctions (export quotas) on grain sold to the Russians. Assuming other nations do not increase grain exports to the Russians, all of the following would occur except ‾\underline { \text { except } } except ​ :

Under the provisions of the World Trade Organization, Canada would have the right to impose countervailing duties on imports of South Korean steel when the South Korean government provides export subsidies to its steelmakers.

The U.S. "trade-remedy laws" could establish all of the following $\underline { \text { except } }$ :

Suppose the United States imposes trade sanctions (export quotas) on grain sold to the Russians. Assuming other nations do not increase grain exports to the Russians, all of the following would occur $\underline { \text { except } }$ :