Question 1

Define local content requirements.Explain how this helps domestic firms.

Accepted Answer

A local content requirement is a require...

Question 2

Which of the following has been excluded from the agenda for the Doha round of WTO talks that began in 2001?

Accepted Answer

A)  reducing barriers to cross-border investment
B)  phasing out subsidies to agricultural producers
C)  limiting the use of antidumping laws
D)  attempts to tie trade to labor standards in a country
E)  cutting tariffs on industrial goods and servicesF) C) and D)
G) A) and B)

Question 3

Which of the following is an argument against embracing strategic trade policy?

Accepted Answer

A)  It hampers the chances of a country's firms to effectively exploit the first-mover advantages.
B)  It is certain to be captured by special-interest groups within the economy,which will distort it to their own ends.
C)  It increases the prices of the products for the domestic consumers.
D)  It hampers the abilities of the domestic firms to achieve a dominant position in the global industry.
E)  It leads to a compromise in national sovereignty.F) A) and E)
G) A) and C)

Question 4

A government should use subsidies to support promising firms that are active in newly emerging industries,according to

Accepted Answer

A)  strategic trade policy.
B)  public policy.
C)  absolute advantage.
D)  product life-cycle.
E)  industrialization.F) None of the above
G) All of the above

Question 5

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

Accepted Answer

Political arguments for government inter...

Question 6

Which of the following is a loophole in antidumping laws that is being exploited by many countries to pursue protectionism?

Accepted Answer

A)  slackness of enforcement agencies
B)  WTO's noncommittal approach to antidumping laws
C)  bilateral VERs which subvert antidumping laws
D)  vague definition of what constitutes "dumping"
E)  lack of consensus among member nationsF) All of the above
G) C) and E)

Question 7

A charge of 15-20% was levied by the government of Cadmia on the value of automobile accessories imported from a neighboring country.This increased the price of those imported car accessories for the consumers in Cadmia.Which of the following instruments of trade policy is being used by the government of Cadmia?

Accepted Answer

A)  local content tariff
B)  ad valorem tariff
C)  subsidies
D)  import quotas
E)  antidumping dutiesF) B) and D)
G) A) and E)

Question 8

Both import quotas and voluntary export restraints (VERs)benefit domestic producers by limiting import competition.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following statements is true about import quotas?

Accepted Answer

A)  Import quotas benefit domestic producers by limiting import competition.
B)  Import quotas always lower the prices for domestically produced goods.
C)  Higher tariff rates are usually applied to imports within the quota than those over the quota.
D)  Import quotas benefit consumers by decreasing the domestic price of an imported good.
E)  Import quotas help foreign producers gain a competitive advantage.F) C) and E)
G) A) and E)

Question 10

What is the result of the threat of antidumping action?

Accepted Answer

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

Question 11

Because Maroji limits the annual export of dairy products to Mipon,Mipon's dairy producers reap extra annual profits of $500 million.The extra profit is referred to as

Accepted Answer

A)  net profit.
B)  quota rent.
C)  trade surplus.
D)  profit margin.
E)  quota share.F) A) and D)
G) C) and D)

Question 12

Which of the following is a provision of the Uruguay Round Agreement?

Accepted Answer

A)  A wide range of services were to be excluded from GATT fair trade and market access rules.
B)  Tariffs on industrial goods were to be raised by more than one-third,and tariffs were to be scrapped on more than 50 percent on a wide range of services.
C)  The International Monetary Fund (IMF) was to be created to implement the GATT agreement.
D)  Barriers on trade in textiles were to be significantly reduced over 10 years.
E)  Average tariff rates imposed by developed nations on manufactured goods were to be raised by 20 percent of the value,the highest level in modern history.F) B) and C)
G) B) and E)

Question 13

The strategic trade policy arguments of the new trade theorists suggest an economic justification for government intervention in international trade and this justification challenges the rationale for unrestricted free trade.

Accepted Answer

A) True 
 B)False

Question 14

Government intervention in international trade can take the form of reducing restrictions on imports and adopting policies that promote exports.

Accepted Answer

A) True 
 B)False

Question 15

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) B) and E)

Question 16

Which of the following is NOT a constraint on a firm's ability to disperse its productive activities to foreign countries?

Accepted Answer

A)  tariff barriers raising the costs of exporting products to a country
B)  quotas restricting the quantity of a good that can be imported into a country
C)  local content requirements demanding a specific fraction of domestic production
D)  increasing integration of the world economy
E)  antidumping policies limiting the ability of a firm to use aggressive pricingF) A) and B)
G) None of the above

Question 17

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 18

Animax Limited got an order to sell 50,000 central processing units (CPUs) to Palladia,but the Palladian government stipulated that 15 percent of the component parts of those CPUs must be produced in Palladia.This stipulation by the Palladian government would be 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) A) and E)

Question 19

According to Paul Krugman,a country that attempts to use strategic trade policy to establish a domestic firm in a dominant position in a global industry,is most likely to

Accepted Answer

A)  dominate the industry.
B)  move away from protectionism.
C)  provoke retaliation.
D)  incur huge financial debts.
E)  upset the special-interest groups within the economy.F) C) and D)
G) B) and D)

Question 20

Which of the following statements is true about voluntary export restraints (VERs) ?

Accepted Answer

A)  VERs benefit consumers by limiting import competition.
B)  VERs reduce the domestic price of an imported good.
C)  When imports are limited to a low percentage of the market by a VER,the price is bid up for that limited foreign supply.
D)  Foreign producers agree to VERs because they fear economic instability in the world economy.
E)  VERs negatively affect domestic producers by increasing import competition.F) B) and C)
G) All of the above

Exam 7: Government Policy and International Trade

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

Correct Answer
verified

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

Correct Answer
verified
Political arguments for government inter...
View Answer

Because Maroji limits the annual export of dairy products to Mipon,Mipon's dairy producers reap extra annual profits of $500 million.The extra profit is referred to as

Correct Answer
verified

Both import quotas and voluntary export restraints (VERs)benefit domestic producers by limiting import competition.

Correct Answer
verified

Which of the following statements is true about import quotas?

Correct Answer
verified

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

Correct Answer
verified

Which of the following statements is true about voluntary export restraints (VERs) ?

Correct Answer
verified

A government should use subsidies to support promising firms that are active in newly emerging industries,according to

Correct Answer
verified

Which of the following is an argument against embracing strategic trade policy?

Correct Answer
verified

Which of the following is NOT a constraint on a firm's ability to disperse its productive activities to foreign countries?

Correct Answer
verified

The strategic trade policy arguments of the new trade theorists suggest an economic justification for government intervention in international trade and this justification challenges the rationale for unrestricted free trade.

Correct Answer
verified

Which of the following is a loophole in antidumping laws that is being exploited by many countries to pursue protectionism?

Correct Answer
verified

Correct Answer
verified

Which of the following has been excluded from the agenda for the Doha round of WTO talks that began in 2001?

Correct Answer
verified

Animax Limited got an order to sell 50,000 central processing units (CPUs) to Palladia,but the Palladian government stipulated that 15 percent of the component parts of those CPUs must be produced in Palladia.This stipulation by the Palladian government would be example of a(n)

Correct Answer
verified

Which of the following is a provision of the Uruguay Round Agreement?

Correct Answer
verified

What is the result of the threat of antidumping action?

Correct Answer
verified

According to Paul Krugman,a country that attempts to use strategic trade policy to establish a domestic firm in a dominant position in a global industry,is most likely to

Correct Answer
verified

Define local content requirements.Explain how this helps domestic firms.

Correct Answer
verified
A local content requirement is a require...
View Answer

Government intervention in international trade can take the form of reducing restrictions on imports and adopting policies that promote exports.

Correct Answer
verified

Exam 7: Government Policy and International Trade

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

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

Because Maroji limits the annual export of dairy products to Mipon,Mipon's dairy producers reap extra annual profits of $500 million.The extra profit is referred to as

Correct AnswerverifiedShow Answer

Both import quotas and voluntary export restraints (VERs)benefit domestic producers by limiting import competition.

Correct AnswerverifiedShow Answer

Which of the following statements is true about import quotas?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following statements is true about voluntary export restraints (VERs) ?

Correct AnswerverifiedShow Answer

A government should use subsidies to support promising firms that are active in newly emerging industries,according to

Correct AnswerverifiedShow Answer

Which of the following is an argument against embracing strategic trade policy?

Correct AnswerverifiedShow Answer

Which of the following is NOT a constraint on a firm's ability to disperse its productive activities to foreign countries?

Correct AnswerverifiedShow Answer

The strategic trade policy arguments of the new trade theorists suggest an economic justification for government intervention in international trade and this justification challenges the rationale for unrestricted free trade.

Correct AnswerverifiedShow Answer

Which of the following is a loophole in antidumping laws that is being exploited by many countries to pursue protectionism?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following has been excluded from the agenda for the Doha round of WTO talks that began in 2001?

Correct AnswerverifiedShow Answer

Animax Limited got an order to sell 50,000 central processing units (CPUs) to Palladia,but the Palladian government stipulated that 15 percent of the component parts of those CPUs must be produced in Palladia.This stipulation by the Palladian government would be example of a(n)

Correct AnswerverifiedShow Answer

Which of the following is a provision of the Uruguay Round Agreement?

Correct AnswerverifiedShow Answer

What is the result of the threat of antidumping action?

Correct AnswerverifiedShow Answer

According to Paul Krugman,a country that attempts to use strategic trade policy to establish a domestic firm in a dominant position in a global industry,is most likely to

Correct AnswerverifiedShow Answer

Define local content requirements.Explain how this helps domestic firms.

Correct AnswerverifiedA local content requirement is a require...View AnswerShow Answer

Government intervention in international trade can take the form of reducing restrictions on imports and adopting policies that promote exports.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
verified
Political arguments for government inter...
View Answer

Correct Answer
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verified
A local content requirement is a require...
View Answer

Correct Answer
verified