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| 1 | |
A specific tariff is levied as a fixed charge for unit of an imported good. |
| | A) | True |
| | B) | False |
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| 2 | |
Both government and consumers realize significant gains as a result of tariffs, while domestic producers typically see a negative effect. |
| | A) | True |
| | B) | False |
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| 3 | |
Agriculture tends to be one of the largest beneficiaries of subsidies in most countries. |
| | A) | True |
| | B) | False |
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| 4 | |
The extra profit that producers make when supply is artificially limited by an import quota is referred to as quota rent. |
| | A) | True |
| | B) | False |
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| 5 | |
Countries may impose trade barriers in an effort to protect national security. |
| | A) | True |
| | B) | False |
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| 6 | |
_____________ refers to a situation in which a government does not attempt to restrict what its citizen can buy from or sell to another country. |
| | A) | Political economy |
| | B) | Strategic trade policy |
| | C) | Mercantilism |
| | D) | Free trade |
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| 7 | |
Subsidies, quotas, voluntary export restraints, and antidumping duties are all examples of |
| | A) | foreign policy |
| | B) | tariffs |
| | C) | administrative policies |
| | D) | nontariff barriers |
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| 8 | |
When tariffs are imposed, prices generally |
| | A) | fall |
| | B) | are not affected |
| | C) | rise |
| | D) | stabilize |
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| 9 | |
All of the following are true about local content requirements EXCEPT: |
| | A) | Local content requirement are costly to consumers by limiting their access to foreign goods. |
| | B) | In the United States, the federal government must give preference to domestic producers unless there is a significant price difference between domestic and foreign goods. |
| | C) | Content is measured in physical terms, not in value. |
| | D) | Local content requirements are generally used to protect employment. |
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| 10 | |
If a country requires that all imports of a certain product arrive through a small customs entry point that is both remote and poorly staffed, the country is using _______ as a means of limiting imports. |
| | A) | local content requirements |
| | B) | quota rents |
| | C) | administrative policies |
| | D) | antidumping policies |
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| 11 | |
Dumping: |
| | A) | is an environmental concern that affects both groundwater and the oceans. |
| | B) | is the slang term for measure firms use to protect themselves from countervailing duties. |
| | C) | is the selling of goods in a foreign market below the cost to produce them |
| | D) | is commonly used method of selling off obsolete or slow moving goods. |
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| 12 | |
If France threatens punitive trade sanctions to force Canada to "play by the rules," France is employing a _____ policy. |
| | A) | retaliation |
| | B) | national security |
| | C) | consumer protection |
| | D) | human rights protection |
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| 13 | |
Trade can be used to support foreign policy objectives. For example, the U.S. Congress passed the Helms-Burton Act and the D'Amato Act, which |
| | A) | became model legislation adopted by most European Union countries. |
| | B) | were instrumental in bringing down Communist governments. |
| | C) | were well-intentioned, but difficult to enforce. |
| | D) | were instrumental in the development of the WTO. |
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| 14 | |
Many economists criticize ______ for trade intervention arguing that it leads to prolonged inefficiency. |
| | A) | the retaliation policy |
| | B) | strategic trade policy |
| | C) | the infant industry argument |
| | D) | human rights protection |
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| 15 | |
According to Krugman, trade policy designed to retaliate against another country's trade policy |
| | A) | would benefit consumers |
| | B) | would benefit taxpayers |
| | C) | would hurt the initiating nation |
| | D) | would hurt the citizens of both countries |
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| 16 | |
GATT was replaced in 1995 by |
| | A) | the UN |
| | B) | the WTO |
| | C) | the OECD |
| | D) | the Smoot-Hawley Act |
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| 17 | |
The _______, passed in 1930 by the U.S., raised tariff barriers in an effort to protect domestic industries and encourage Americans to buy domestically produced products. |
| | A) | Smoot-Hawley Act |
| | B) | GATT |
| | C) | WTO |
| | D) | Helms-Burton Act |
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| 18 | |
Protectionism |
| | A) | increased in the 1980's and 1990's after a period of relative decline. |
| | B) | was endorsed by the theories of both Adam Smith and David Ricardo. |
| | C) | helps consumers by keeping prices low. |
| | D) | preserves jobs in both the short-term and long-term. |
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| 19 | |
____________is an attempt to narrow the gaps in the way intellectual property rights are protected around the world, and to bring them under common international rules. |
| | A) | TRIPS |
| | B) | GATS |
| | C) | The Smoot-Hawley Act |
| | D) | The Foreign Intellectual Property Rights Accord |
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| 20 | |
The WTO's role as a global policeman for trade has so far been |
| | A) | successful |
| | B) | moderately unsuccessful |
| | C) | quite ineffective |
| | D) | completely disorganized |
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| 21 | |
In November 1999, WTO representatives met in Seattle to launch the "millennium round" of talks. This became a watershed because: |
| | A) | it was the most successful round of talks held under the GATT and WTO umbrellas. |
| | B) | despite the protests outside, the delegates reached consensus on key goals. |
| | C) | the sponsorship of prominent Washington state companies like Microsoft and Boeing pioneered a new way to sponsor such international meetings. |
| | D) | a wide range of labor, environmental and human rights groups focused new attention on the role of trade. |
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| 22 | |
Intellectual property rights have become thorny areas of international trade, especially in relation to software, pharmaceuticals, music and entertainment. In response, |
| | A) | uniform patent and copyright laws have been adopted and enforced by all WTO members. |
| | B) | both the developed and developing world are standing together on protect the rights of companies. |
| | C) | there has been a growing awareness that innovation has become a driver for economic growth. |
| | D) | this was one area of agreement in the Doha round and meetings leading up to it. |
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| 23 | |
The Doha Round is focusing on all of the following issues except |
| | A) | cutting tariffs on industrial goods and services |
| | B) | phasing out subsidies to agricultural producers |
| | C) | reducing barriers to cross-border investment |
| | D) | encouraging the establishment of anti-dumping laws |
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| 24 | |
A firm will need to consider ________________ as it develops and executes its strategy, disperse activities around the globe and recognizes its cost structures. |
| | A) | trade barriers |
| | B) | the culture of its "C level" leadership |
| | C) | language barriers |
| | D) | theories of mercantilism |
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| 25 | |
Business firms are major players on the international trade scene, and as such: |
| | A) | they should ignore the minor complaints and extreme demands of protestors. |
| | B) | they should pay less attention to national laws and focus more on their own strategies. |
| | C) | they may ignore world events and international trade theory at the operational level and let experts with specialized policy backgrounds make the decisions to prevent costly errors. |
| | D) | be aware of the problems both protectionism and free trade can bring. |
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