Question 1

One objective of export tariffs is to

Accepted Answer

A)   abide by the rules enforced by the WTO.
B)   curb the competition offered by foreign firms to domestic firms.
C)   reduce exports from a sector to ensure a sufficient supply.
D)   maintain a positive trade deficit.
E)   increase the flow of capital in the international market.F) B) and C)
G) A) and E)

Question 2

One of the reasons for the trend toward greater protectionism during the 1980s and 1990s was that many countries found ways to get around GATT regulations.

Accepted Answer

A) True 
 B)False

Question 3

One of the more frequent political arguments for government intervention states that it is necessary to protect industries from foreign competition.

Accepted Answer

A) True 
 B)False  True

Question 4

The ________ does not reinforce that the best interests of international business are served by a free trade stance.

Accepted Answer

A)   increasing integration of the world economy
B)   internationalization of production
C)   trend toward greater protectionism
D)   implementation of open markets
E)   dispersion of production activitiesF) A) and E)
G) A) and C)

Question 5

A nation that imposes a fixed charge of $3 per barrel of oil imported into the country is relying on which instrument of trade?

Accepted Answer

A)   specific tariff
B)   GATT tariff
C)   subsidies
D)   import quotas
E)   antidumping dutiesF) B) and E)
G) A) and B)

Question 6

The Smoot-Hawley Act tried to divert consumer demand away from foreign products by

Accepted Answer

A)   subsidizing domestic businesses.
B)   establishing tariff barriers.
C)   exporting more products to Europe.
D)   demanding local content requirements.
E)   creating a trade deal with Canada and Mexico.F) D) and E)
G) A) and E)

Question 7

A(n)  ________ is in place when a lower tariff rate is applied to imports within the government quota than those over the quota.

Accepted Answer

A)   tariff rate quota
B)   voluntary import restraint
C)   import duty
D)   quota rent
E)   import quotaF) A) and E)
G) C) and E)

Question 8

In most countries, the retail industry tends to be one of the largest recipients of subsidies.

Accepted Answer

A) True 
 B)False

Question 9

The Smoot-Hawley Act had a damaging effect on

Accepted Answer

A)   the balance-of-payment of the United States.
B)   cash flow in the domestic economy of the United States.
C)   prices of natural resources in the United States.
D)   employment abroad.
E)   accrued liabilities of the United States.F) C) and E)
G) None of the above

Question 10

A tiny South Pacific island country produces large quantities of coconut-based products. To protect this industry, the island government mandates that only designated trading companies can import the crop, each of which is allocated the right to import a maximum number of pounds of coconuts each year. This is an example of a(n)

Accepted Answer

A)   import duty.
B)   subsidy.
C)   import tariff.
D)   local content requirement.
E)   import quota.F) B) and E)
G) A) and E)

Question 11

What is the infant industry argument? What are its implications for the world economy? What are the criticisms of this argument?

Accepted Answer

The infant industry argument is by far t...

Question 12

A bound tariff rate is

Accepted Answer

A)   the lowest rate that can be charged.
B)   equal to the spot exchange rate.
C)   based on the forward exchange rate.
D)   the average tariff rate a country sets within a year.
E)   the highest rate that can be charged.F) B) and D)
G) A) and D)

Question 13

Many developing countries have a potential comparative advantage in manufacturing, but new manufacturing industries cannot initially compete with well-established industries in developed countries. This demonstrates the

Accepted Answer

A)   economic development argument.
B)   comparative advantage theory.
C)   national security argument.
D)   infant industry argument.
E)   mixed economy theory.F) A) and E)
G) A) and D)

Question 14

If Indonesia exports vast quantities of cheap textiles to Italy, selling them at below their costs of production, it would be an example of

Accepted Answer

A)   monopolism.
B)   dumping.
C)   offshoring.
D)   nearshoring.
E)   subsidizing.F) A) and B)
G) C) and D)

Question 15

SilverFinn makes high-end jewelry for women. This jewelry is manufactured and patented in Italy. Manufacturers in Argentina create counterfeit SilverFinn jewelry and sell it in local markets at nearly similar prices to the original SilverFinn jewelry sold in other countries. This lack of intellectual property protection is like to result in

Accepted Answer

A)   expansion of the world market for SilverFinn products.
B)   reduction in the export opportunities for SilverFinn jewelry in Argentina.
C)   reduction in import of all Argentinian goods.
D)   increase in the prices of jewelry produced by SilverFinn.
E)   reduction in export opportunities from Argentina to other countries.F) A) and D)
G) A) and E)

Question 16

Ultimately, antidumping policies are put in place to

Accepted Answer

A)   protect consumers from high prices.
B)   prevent domestic firms from unloading their excess production in domestic markets.
C)   protect domestic producers from unfair foreign competition.
D)   protect consumers from substandard and hazardous products.
E)   prevent foreign products from entering domestic market.F) D) and E)
G) B) and C) C

Question 17

Export tariffs are not as common as import tariffs.

Accepted Answer

A) True 
 B)False

Question 18

Bilateral voluntary export restraints, or VERs, circumvented GATT agreements because

Accepted Answer

A)   these nations withdrew their membership to the GATT.
B)   the member nations had ceased to recognize GATT as a regulatory body for international trade.
C)   VERs were not a recognized trade barrier under the GATT constitution.
D)   neither the importing country nor the exporting country complained to the GATT bureaucracy for it to take action.
E)   member nations erected a wall of tariff barriers.F) D) and E)
G) None of the above

Question 19

Give a brief description of the origin, functions, and successes of GATT from 1947 to 1979, before protectionist trends gained momentum across the world.

Accepted Answer

Under U.S. leadership, the GATT was esta...

Question 20

Government intervention can be self-defeating because it tends to protect the inefficient rather than help firms become efficient global competitors.

Accepted Answer

A) True 
 B)False  True

Exam 7: Government Policy and International Trade

One objective of export tariffs is to

Correct Answer
verified

One of the reasons for the trend toward greater protectionism during the 1980s and 1990s was that many countries found ways to get around GATT regulations.

Correct Answer
verified

One of the more frequent political arguments for government intervention states that it is necessary to protect industries from foreign competition.

Correct Answer
verified
True

The ________ does not reinforce that the best interests of international business are served by a free trade stance.

Correct Answer
verified

A nation that imposes a fixed charge of $3 per barrel of oil imported into the country is relying on which instrument of trade?

Correct Answer
verified

The Smoot-Hawley Act tried to divert consumer demand away from foreign products by

Correct Answer
verified

A(n) ________ is in place when a lower tariff rate is applied to imports within the government quota than those over the quota.

Correct Answer
verified

In most countries, the retail industry tends to be one of the largest recipients of subsidies.

Correct Answer
verified

The Smoot-Hawley Act had a damaging effect on

Correct Answer
verified

Correct Answer
verified

What is the infant industry argument? What are its implications for the world economy? What are the criticisms of this argument?

Correct Answer
verified
The infant industry argument is by far t...
View Answer

A bound tariff rate is

Correct Answer
verified

Many developing countries have a potential comparative advantage in manufacturing, but new manufacturing industries cannot initially compete with well-established industries in developed countries. This demonstrates the

Correct Answer
verified

If Indonesia exports vast quantities of cheap textiles to Italy, selling them at below their costs of production, it would be an example of

Correct Answer
verified

Correct Answer
verified

Ultimately, antidumping policies are put in place to

Correct Answer
verified
C

Export tariffs are not as common as import tariffs.

Correct Answer
verified

Bilateral voluntary export restraints, or VERs, circumvented GATT agreements because

Correct Answer
verified

Give a brief description of the origin, functions, and successes of GATT from 1947 to 1979, before protectionist trends gained momentum across the world.

Correct Answer
verified
Under U.S. leadership, the GATT was esta...
View Answer

Government intervention can be self-defeating because it tends to protect the inefficient rather than help firms become efficient global competitors.

Correct Answer
verified
True

Exam 7: Government Policy and International Trade

One objective of export tariffs is to

Correct AnswerverifiedShow Answer

One of the reasons for the trend toward greater protectionism during the 1980s and 1990s was that many countries found ways to get around GATT regulations.

Correct AnswerverifiedShow Answer

One of the more frequent political arguments for government intervention states that it is necessary to protect industries from foreign competition.

Correct AnswerverifiedTrue

The ________ does not reinforce that the best interests of international business are served by a free trade stance.

Correct AnswerverifiedShow Answer

A nation that imposes a fixed charge of $3 per barrel of oil imported into the country is relying on which instrument of trade?

Correct AnswerverifiedShow Answer

The Smoot-Hawley Act tried to divert consumer demand away from foreign products by

Correct AnswerverifiedShow Answer

A(n) ________ is in place when a lower tariff rate is applied to imports within the government quota than those over the quota.

Correct AnswerverifiedShow Answer

In most countries, the retail industry tends to be one of the largest recipients of subsidies.

Correct AnswerverifiedShow Answer

The Smoot-Hawley Act had a damaging effect on

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

What is the infant industry argument? What are its implications for the world economy? What are the criticisms of this argument?

Correct AnswerverifiedThe infant industry argument is by far t...View AnswerShow Answer

A bound tariff rate is

Correct AnswerverifiedShow Answer

Many developing countries have a potential comparative advantage in manufacturing, but new manufacturing industries cannot initially compete with well-established industries in developed countries. This demonstrates the

Correct AnswerverifiedShow Answer

If Indonesia exports vast quantities of cheap textiles to Italy, selling them at below their costs of production, it would be an example of

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Ultimately, antidumping policies are put in place to

Correct AnswerverifiedC

Export tariffs are not as common as import tariffs.

Correct AnswerverifiedShow Answer

Bilateral voluntary export restraints, or VERs, circumvented GATT agreements because

Correct AnswerverifiedShow Answer

Give a brief description of the origin, functions, and successes of GATT from 1947 to 1979, before protectionist trends gained momentum across the world.

Correct AnswerverifiedUnder U.S. leadership, the GATT was esta...View AnswerShow Answer

Government intervention can be self-defeating because it tends to protect the inefficient rather than help firms become efficient global competitors.

Correct AnswerverifiedTrue

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True

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The infant industry argument is by far t...
View Answer

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C

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Under U.S. leadership, the GATT was esta...
View Answer

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True