Question 1

Maroji is a major exporter of dairy products.Mipon is a major exporter of heavy machinery but also has a sizeable domestic dairy industry.Since it imports a sizeable amount of heavy machinery from Mipon,Maroji,at the request of Mipon,limited the amount of dairy products it exports to Mipon each year.This is an example of

Accepted Answer

A)  tariff rate quota
B)  quota rent
C)  voluntary export restraint (VER) 
D)  quota share
E)  export embargoF) A) and E)
G) D) and E)

Question 2

For years,the world had used the country of Votnam as a place to assemble goods because of the country's availability of cheap labor.To shift its manufacturing base from simple assembly to full-fledged manufacture of components and finished goods,Votnam introduced a policy that 35 percent of the value of a product must be produced locally.This is an example of a(n)

Accepted Answer

A)  international allocation requirement
B)  local content requirement
C)  specific quota requirement
D)  ad valorem portion requirement
E)  domestic sales requirementF) C) and D)
G) B) and E)

Question 3

Myra is a firm producing premium handbags for women.These bags are manufactured and patented in the country of Ceria.Manufacturers in the country of Argonia create counterfeit Myra bags and sell them in the local markets of Argonia.These bags are sold at almost similar prices to the original in other countries.Which of the following is likely to happen?

Accepted Answer

A)  expansion of world market for Cerian products
B)  reduction in the export opportunities for Myra's hand bags in Argonia
C)  reduction in import of all Argonian goods
D)  increase in the prices of handbags produced by Myra in Argonia
E)  reduction in opportunities of export from Argonia to other countriesF) A) and B)
G) B) and D)

Question 4

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 5

Some countries argue that government intervention to protect certain domestic industries can compromise national security.

Accepted Answer

A) True 
 B)False

Question 6

The Republic of Zander is a member of the European Union (EU) .As an EU member,the Republic of Zander gives cash grants to domestic agricultural producers.Which of the following instruments of trade policy is being used by the government of The Republic of Zander?

Accepted Answer

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

Question 7

Which of the following is the most common political argument for government intervention in international trade?

Accepted Answer

A)  decreasing the prices of products in the domestic market
B)  promoting strategic trade policy
C)  protecting jobs and industries from unfair foreign competition
D)  improving efficiency of domestic labor
E)  protecting human rightsF) B) and E)
G) None of the above

Question 8

Which of the following best indicates the motive for foreign firms to engage in dumping?

Accepted Answer

A)  unloading excess production in foreign markets
B)  cutting labor costs to reduce the costs of production
C)  providing a wider range of products for consumers in foreign markets
D)  meeting the voluntary export requirements imposed on it
E)  obtaining subsidies from the importing countryF) A) and E)
G) C) and E)

Question 9

By lowering production costs,subsidies help domestic producers to

Accepted Answer

A)  gain export markets.
B)  meet import quotas.
C)  meet voluntary export restraints.
D)  meet the local content requirement.
E)  compete in the domestic market against local producers.F) C) and D)
G) None of the above

Question 10

The principal function of the trade sanctions the U.S.has in place against Cuba is to

Accepted Answer

A)  prevent other countries from trading with Cuba.
B)  aid Cuba in creating a direct trade route to the U.S.
C)  create a nearby dumping site for large businesses.
D)  impoverish Cuba to lead to the downfall of the communist government.
E)  force Cuba to enter into the NATO agreement.F) A) and B)
G) All of the above

Question 11

What constitutes the revised case for free trade?

Accepted Answer

The strategic trade policy arguments of ...

Question 12

The tiny South Pacific island country of Maroji produces a lot of milk and milk-based products.To protect this industry,Maroji mandates that only designated trading companies can import cheese,each of which is allocated the right to import a maximum number of pounds of cheese each year.By doing this,Maroji controls the amount of imported cheese.This is an example of a(n)

Accepted Answer

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

Question 13

Governments can protect consumers from unsafe products by issuing a limit or a ban on such products.

Accepted Answer

A) True 
 B)False

Question 14

How do trade barriers constrain a firm's ability to disperse its productive activities?

Accepted Answer

First and most obvious,tariff barriers r...

Question 15

What is a voluntary export restraint? Why do exporting countries agree to VERs? Explain with an example.

Accepted Answer

A voluntary export restraint is a quota ...

Question 16

Dumping takes place when foreign producers

Accepted Answer

A)  attempt hostile takeovers of domestic firms and usurp the available resources for production.
B)  indiscriminately exploit the natural resources of a foreign country to create a later demand that can be met only by imports.
C)  eliminate competition by subsidizing prices in a foreign market with home market profits and eventually raising prices to earn substantial profits.
D)  capture the niche market rather than the masses.
E)  export only a small quantity of their products into an importing country.F) A) and E)
G) A) and D)

Question 17

Explain the organizational structure and the key functions of the WTO.

Accepted Answer

The WTO acts as an umbrella organization...

Question 18

Briefly describe the implications of the strategic trade policy as applied to international trade.

Accepted Answer

The strategic trade policy argument has ...

Question 19

Free trade as a government policy was first officially embraced by Germany in 1846,when the Bundestag repealed the Corn Laws.

Accepted Answer

A) True 
 B)False

Question 20

According to Krugman,the ideal way for a country to respond,when the foreign competitors of its companies are already being supported by government subsidies,is probably not to engage in retaliatory action,but to

Accepted Answer

A)  help establish rules that minimize the use of trade-distorting subsidies.
B)  adopt the strategic trade policy as a way to establish domestic firms in a dominant position in the global industry.
C)  provide a subsidy to a new industry where the foreign competitors have not had the benefit of such strategic trade policies.
D)  use a combination of home-market protection and export-promoting subsidies.
E)  provide high levels of subsidies to the oldest industry in the country.F) A) and B)
G) B) and E)

Exam 7: Government Policy and International Trade

Explain the organizational structure and the key functions of the WTO.

Correct Answer
verified
The WTO acts as an umbrella organization...
View Answer

Governments can protect consumers from unsafe products by issuing a limit or a ban on such products.

Correct Answer
verified

Some countries argue that government intervention to protect certain domestic industries can compromise national security.

Correct Answer
verified

Free trade as a government policy was first officially embraced by Germany in 1846,when the Bundestag repealed the Corn Laws.

Correct Answer
verified

What is a voluntary export restraint? Why do exporting countries agree to VERs? Explain with an example.

Correct Answer
verified
A voluntary export restraint is a quota ...
View Answer

What constitutes the revised case for free trade?

Correct Answer
verified
The strategic trade policy arguments of ...
View Answer

The principal function of the trade sanctions the U.S.has in place against Cuba is to

Correct Answer
verified

Dumping takes place when foreign producers

Correct Answer
verified

Which of the following is the most common political argument for government intervention in international trade?

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

Correct Answer
verified

Correct Answer
verified

Briefly describe the implications of the strategic trade policy as applied to international trade.

Correct Answer
verified
The strategic trade policy argument has ...
View Answer

According to Krugman,the ideal way for a country to respond,when the foreign competitors of its companies are already being supported by government subsidies,is probably not to engage in retaliatory action,but to

Correct Answer
verified

Correct Answer
verified

How do trade barriers constrain a firm's ability to disperse its productive activities?

Correct Answer
verified
First and most obvious,tariff barriers r...
View Answer

By lowering production costs,subsidies help domestic producers to

Correct Answer
verified

The Republic of Zander is a member of the European Union (EU) .As an EU member,the Republic of Zander gives cash grants to domestic agricultural producers.Which of the following instruments of trade policy is being used by the government of The Republic of Zander?

Correct Answer
verified

Which of the following best indicates the motive for foreign firms to engage in dumping?

Correct Answer
verified

Correct Answer
verified

Exam 7: Government Policy and International Trade

Explain the organizational structure and the key functions of the WTO.

Correct AnswerverifiedThe WTO acts as an umbrella organization...View AnswerShow Answer

Governments can protect consumers from unsafe products by issuing a limit or a ban on such products.

Correct AnswerverifiedShow Answer

Some countries argue that government intervention to protect certain domestic industries can compromise national security.

Correct AnswerverifiedShow Answer

Free trade as a government policy was first officially embraced by Germany in 1846,when the Bundestag repealed the Corn Laws.

Correct AnswerverifiedShow Answer

What is a voluntary export restraint? Why do exporting countries agree to VERs? Explain with an example.

Correct AnswerverifiedA voluntary export restraint is a quota ...View AnswerShow Answer

What constitutes the revised case for free trade?

Correct AnswerverifiedThe strategic trade policy arguments of ...View AnswerShow Answer

The principal function of the trade sanctions the U.S.has in place against Cuba is to

Correct AnswerverifiedShow Answer

Dumping takes place when foreign producers

Correct AnswerverifiedShow Answer

Which of the following is the most common political argument for government intervention in international trade?

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Briefly describe the implications of the strategic trade policy as applied to international trade.

Correct AnswerverifiedThe strategic trade policy argument has ...View AnswerShow Answer

According to Krugman,the ideal way for a country to respond,when the foreign competitors of its companies are already being supported by government subsidies,is probably not to engage in retaliatory action,but to

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

How do trade barriers constrain a firm's ability to disperse its productive activities?

Correct AnswerverifiedFirst and most obvious,tariff barriers r...View AnswerShow Answer

By lowering production costs,subsidies help domestic producers to

Correct AnswerverifiedShow Answer

The Republic of Zander is a member of the European Union (EU) .As an EU member,the Republic of Zander gives cash grants to domestic agricultural producers.Which of the following instruments of trade policy is being used by the government of The Republic of Zander?

Correct AnswerverifiedShow Answer

Which of the following best indicates the motive for foreign firms to engage in dumping?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified
The WTO acts as an umbrella organization...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A voluntary export restraint is a quota ...
View Answer

Correct Answer
verified
The strategic trade policy arguments of ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The strategic trade policy argument has ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
First and most obvious,tariff barriers r...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified