Question 1

Inadequate protections for intellectual property reduce the incentive for innovation.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is a reason for the pressure for greater protectionism that occurred during the 1980s and early 1990s?

Accepted Answer

A)  The U.S. Congress erected an enormous wall of tariff barriers. 
B)  Japanese economic failure strained the world trading system. 
C)  The persistent trade surplus in the United States strained the world trading system. 
D)  Many countries found ways to get around GATT regulations.

Question 3

The Helms-Burton Act of 1996 was aimed at foreign companies that were undermining U.S. trade sanctions against Libya and Iran.

Accepted Answer

A) True 
 B)False

Question 4

Protecting industries deemed important for national security, and retaliating against unfair foreign competition are economic arguments for intervention.

Accepted Answer

A) True 
 B)False

Question 5

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.

Question 6

Discuss the Doha Round of trade talks.

Accepted Answer

The answer of Discuss the Doha Round of trade talks....

Question 7

Why are tariff rates on agricultural products generally higher than tariff rates on manufactured products or services?

Accepted Answer

The answer of Why are tariff rates on agricultural products...

Question 8

The WTO does not have the power to impose trade sanctions.

Accepted Answer

A) True 
 B)False

Question 9

A subsidy helps domestic producers to compete against foreign imports.

Accepted Answer

A) True 
 B)False

Question 10

Antidumping actions are concentrated in certain sectors of the economy such as basic metal industries, chemicals, plastics, and machinery and electrical equipment.

Accepted Answer

A) True 
 B)False

Question 11

One of the successful outcomes of the Doha Round negotiations has been that many nations have proceeded with bilateral free trade agreements.

Accepted Answer

A) True 
 B)False

Question 12

Explain the disadvantages of government protectionism as it relates to competitive advantage.

Accepted Answer

The answer of Explain the disadvantages of government protectionism as...

Question 13

The Buy America Act specifies that government agencies must give preference to American products when putting contracts for equipment out to bid unless the foreign products have a significant price disadvantage.

Accepted Answer

A) True 
 B)False

Question 14

In 1997, two South Korean manufacturers of semiconductors, LG Semicon and Hyundai Electronics, were accused of selling dynamic random access memory chips (DRAMs) in the U.S. market at below their costs of production. It was alleged that the firms were trying to unload their excess production in the United States. This is an example of:

Accepted Answer

A)  ad valorem tariff. 
B)  subsidy. 
C)  dumping. 
D)  import quota.

Question 15

TRIPS regulations oblige WTO members to do all of the following EXCEPT:

Accepted Answer

A)  grant and enforce patents lasting at least 20 years. 
B)  grant and enforce copyrights lasting 50 years. 
C)  comply with the rules within five years in the case of rich countries. 
D)  comply with the rules within 10 years in the case of the poorest countries.

Question 16

Discuss the economic reasons for government intervention in markets.

Accepted Answer

The answer of Discuss the economic reasons for government intervention...

Question 17

What has been the experience of the WTO to date? What does the future look like for the organization?

Accepted Answer

The answer of What has been the experience of the...

Question 18

GATT has not recognized the infant industry argument as a legitimate reason for protectionism.

Accepted Answer

A) True 
 B)False

Question 19

A company that sells its product in a foreign market below the cost of production may be accused of dumping.

Accepted Answer

A) True 
 B)False

Question 20

Bureaucratic rules designed to make it difficult for imports to enter a country are called local content requirements.

Accepted Answer

A) True 
 B)False

Exam 7: The Political Economy of International Trade

Inadequate protections for intellectual property reduce the incentive for innovation.

Which of the following is a reason for the pressure for greater protectionism that occurred during the 1980s and early 1990s?

The Helms-Burton Act of 1996 was aimed at foreign companies that were undermining U.S. trade sanctions against Libya and Iran.

Protecting industries deemed important for national security, and retaliating against unfair foreign competition are economic arguments for intervention.

Local content regulations:

Discuss the Doha Round of trade talks.

Why are tariff rates on agricultural products generally higher than tariff rates on manufactured products or services?

The WTO does not have the power to impose trade sanctions.

A subsidy helps domestic producers to compete against foreign imports.

Antidumping actions are concentrated in certain sectors of the economy such as basic metal industries, chemicals, plastics, and machinery and electrical equipment.

One of the successful outcomes of the Doha Round negotiations has been that many nations have proceeded with bilateral free trade agreements.

Explain the disadvantages of government protectionism as it relates to competitive advantage.

The Buy America Act specifies that government agencies must give preference to American products when putting contracts for equipment out to bid unless the foreign products have a significant price disadvantage.

TRIPS regulations oblige WTO members to do all of the following EXCEPT:

Discuss the economic reasons for government intervention in markets.

What has been the experience of the WTO to date? What does the future look like for the organization?

GATT has not recognized the infant industry argument as a legitimate reason for protectionism.

A company that sells its product in a foreign market below the cost of production may be accused of dumping.

Bureaucratic rules designed to make it difficult for imports to enter a country are called local content requirements.