Question 1

________ are put in place to make it difficult for imports to enter a country.

Accepted Answer

A)   Free trade policies
B)   Consumer regulations
C)   Subsidies
D)   Administrative trade policies
E)   Open market plansF) C) and E)
G) A) and B)

Question 2

Quota rent refers to the extra profit that producers make when supply is artificially limited by an import quota.

Accepted Answer

A) True 
 B)False

Question 3

Some governments "threaten" trade sanctions or other measures as a way to get another government to enforce safety standards or enforce intellectual property laws. This method of intervention is known as

Accepted Answer

A)   diversification.
B)   deregulation.
C)   retaliation.
D)   liberalization.
E)   monopolization.F) A) and B)
G) A) and E)

Question 4

One of the reasons why protectionist pressures arose around the world during the 1980s was

Accepted Answer

A)   the different ways many countries found to get around GATT regulations.
B)   the opening up of national markets to cheap products from China.
C)   the fall of the Soviet Union.
D)   the persistent trade lead taken by the United States.
E)   the Japanese failure in industries such as automobiles and semiconductors that strained the world trading system.F) A) and E)
G) A) and B)

Question 5

In some years, the U.S. government has paid wheat farmers an additional 50 cents on every bushel of wheat they sell. This money is an example of a(n)

Accepted Answer

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

Question 6

In the Uruguay Round of the WTO, member countries sought to exempt trade in services from GATT rules.

Accepted Answer

A) True 
 B)False

Question 7

After the Great Depression, there was a favorable shift in the U.S. government toward free trade.

Accepted Answer

A) True 
 B)False

Question 8

Mexico has raised the taxes on cheeses imported from the United States. These taxes are an example of a(n)

Accepted Answer

A)   subsidy.
B)   referendum.
C)   antidumping policy.
D)   local content requirement.
E)   tariff.F) B) and E)
G) B) and D)

Question 9

The purpose of an export tariff is to encourage exporting and guarantee the sufficient supply of a good within a country.

Accepted Answer

A) True 
 B)False

Question 10

The first official government policy for free trade occurred in which country?

Accepted Answer

A)   China
B)   Great Britain
C)   United States
D)   Germany
E)   ArgentinaF) A) and B)
G) B) and D)

Question 11

ComTek Limited has an order to sell 50,000 central processing units (CPUs)  to Brazil, but the Brazilian government stipulated that 35 percent of the component parts of those CPUs must be produced in Brazil. This stipulation is an example of a(n)

Accepted Answer

A)   voluntary export restraint.
B)   quota rent.
C)   import quota.
D)   local content requirement.
E)   antidumping policy.F) B) and C)
G) C) and E)

Question 12

What are the political arguments for government intervention into international trade? Give examples.

Accepted Answer

Political arguments for government inter...

Question 13

The ultimate purpose of GATT was to

Accepted Answer

A)   promote U.S. imports of electronics.
B)   diminish U.S. exports.
C)   subsidize agricultural workers.
D)   safeguard intellectual property rights.
E)   establish free trade.F) C) and D)
G) None of the above

Question 14

Tariff rates on manufactured products tend to be much higher than tariff rates on agricultural products.

Accepted Answer

A) True 
 B)False

Question 15

Why is retaliation by government intervention a risky strategy?

Accepted Answer

A)   It encourages dumping by foreign companies.
B)   It could result in increased tariff barriers by the country that is being pressured.
C)   It may expose certain industries that are important for national security to foreign competition.
D)   It allows firms to sell goods in the foreign market at below their fair market value.
E)   It makes it difficult for domestic firms to make any investments by borrowing money from the domestic capital market.F) None of the above
G) A) and B)

Question 16

Briefly discuss the four issues at the forefront of the current agenda of the WTO.

Accepted Answer

Four issues at the forefront of the curr...

Question 17

A charge of 12-18 percent is levied by the government of a foreign nation on the value of automobile accessories imported from a neighboring country. This increased the price of those imported car accessories for the consumers. This foreign nation is using a(n)

Accepted Answer

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

Question 18

What is the result of the threat of antidumping action?

Accepted Answer

A)   It helps the firm raise capital in the primary market.
B)   It limits the ability of a firm to raise prices in response to high demand.
C)   It enhances the firm's ability to disperse its productive activities in an efficient manner.
D)   It limits the ability of a firm to use aggressive pricing to gain market share in a country.
E)   It enhances a firm's competitive advantage to indigenous competitors in that country.F) B) and E)
G) A) and B)

Question 19

Why did telecommunications companies welcome the telecommunication deal brokered by WTO in 1997?

Accepted Answer

A)   It enhanced protection of patents, copyrights, and trademarks (intellectual property) .
B)   It helped resolve deadlock situations arising out of the unwillingness to lower trade barriers between neighboring countries.
C)   It offered a greater ability for companies to offer a global, seamless service for all their corporate needs.
D)   It liberalized trade policies by eliminating tariffs, subsidies, import quotas, antidumping duties, and local content requirements.
E)   It reduced the export of pirated imitations of patented innovations pioneered in a different country.F) D) and E)
G) C) and D)

Question 20

Alexander Hamilton promoted the idea that government should support a new industry with government intervention tactics until the industry is strong enough to face international competition.

Accepted Answer

A) True 
 B)False

Exam 7: Government Policy and International Trade

After the Great Depression, there was a favorable shift in the U.S. government toward free trade.

Correct AnswerverifiedShow Answer

What are the political arguments for government intervention into international trade? Give examples.

Correct AnswerverifiedPolitical arguments for government inter...View AnswerShow Answer

Briefly discuss the four issues at the forefront of the current agenda of the WTO.

Correct AnswerverifiedFour issues at the forefront of the curr...View AnswerShow Answer

________ are put in place to make it difficult for imports to enter a country.

Correct AnswerverifiedShow Answer

Quota rent refers to the extra profit that producers make when supply is artificially limited by an import quota.

Correct AnswerverifiedShow Answer

The first official government policy for free trade occurred in which country?

Correct AnswerverifiedShow Answer

Mexico has raised the taxes on cheeses imported from the United States. These taxes are an example of a(n)

Correct AnswerverifiedShow Answer

Why did telecommunications companies welcome the telecommunication deal brokered by WTO in 1997?

Correct AnswerverifiedShow Answer

In some years, the U.S. government has paid wheat farmers an additional 50 cents on every bushel of wheat they sell. This money is an example of a(n)

Correct AnswerverifiedShow Answer

Tariff rates on manufactured products tend to be much higher than tariff rates on agricultural products.

Correct AnswerverifiedShow Answer

Some governments "threaten" trade sanctions or other measures as a way to get another government to enforce safety standards or enforce intellectual property laws. This method of intervention is known as

Correct AnswerverifiedShow Answer

A charge of 12-18 percent is levied by the government of a foreign nation on the value of automobile accessories imported from a neighboring country. This increased the price of those imported car accessories for the consumers. This foreign nation is using a(n)

Correct AnswerverifiedShow Answer

The ultimate purpose of GATT was to

Correct AnswerverifiedShow Answer

Why is retaliation by government intervention a risky strategy?

Correct AnswerverifiedShow Answer

Alexander Hamilton promoted the idea that government should support a new industry with government intervention tactics until the industry is strong enough to face international competition.

Correct AnswerverifiedShow Answer

The purpose of an export tariff is to encourage exporting and guarantee the sufficient supply of a good within a country.

Correct AnswerverifiedShow Answer

In the Uruguay Round of the WTO, member countries sought to exempt trade in services from GATT rules.

Correct AnswerverifiedShow Answer

ComTek Limited has an order to sell 50,000 central processing units (CPUs) to Brazil, but the Brazilian government stipulated that 35 percent of the component parts of those CPUs must be produced in Brazil. This stipulation is an example of a(n)

Correct AnswerverifiedShow Answer

One of the reasons why protectionist pressures arose around the world during the 1980s was

Correct AnswerverifiedShow Answer

What is the result of the threat of antidumping action?

Correct AnswerverifiedShow Answer

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Political arguments for government inter...
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Four issues at the forefront of the curr...
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