Exam 6: Trade Regulations and Industrial Policies

The average tariff rate today on dutiable imports in the United States is approximately

It is widely recognized that the economic sanctions levied against Iraq in 1990 were a major factor in causing Iraq to withdraw its military forces from Kuwait.

Throughout the post-World War II era, the importance of tariffs as a trade barrier has

The high point of U.S.protectionism occurred with the passage of the Kennedy Act in the 1960s.

The strategic trade policy hypothesis assumes that domestic firms operate under increasing cost conditions as well as in perfectly competitive markets.

The Uruguay Round of trade negotiations resulted in the General Agreement on Tariffs and Trade being succeeded by the World Trade Organization.

Assume Boeing Inc. (of the United States) and Airbus Industries (of Europe) rival for monopoly profits in the Canadian aircraft market. Suppose the two firms face identical cost and demand conditions, as seen in Figure 6.1. Figure 6.1. Strategic Trade Policy: Boeing versus Airbus -Consider Figure 6.1.Suppose the European government provides Airbus a subsidy of $4 million on each aircraft manufactured and that the subsidy convinces Boeing to exit the Canadian market.As the monopoly seller, Airbus maximizes profit by selling ______________ aircraft at a price of $______________, and realizes profits totaling $______________.

The World Trade Organization was established by the ____ of multilateral trade negotiations.

Intellectual property refers to holdings of rare books and pieces of art that are traded on the world market.

Under U.S.commercial policy, which clause permits the modification of a trade liberalization agreement on a temporary basis if serious injury occurs to domestic producers as a result of the agreement?

The only members of the General Agreement on Tariffs and Trade and its successor, the World Trade Organization, are developing countries rather than developed countries.

Normal trade relations (the most-favored-nation clause) tend to result in discriminatory treatment regarding tariff reductions among nations.

Among the codes of conduct addressed at the Tokyo Round of multilateral trade negotiations were customs valuation, product standards, subsidies and countervailing duties, government procurement policies, and import licensing procedures.

Which international organization meets on a regular basis to establish rules for international commerce?

A trade policy designed to alleviate some domestic economic problem by exporting it to foreign countries is known as a (an)

Although the Uruguay Round of multilateral trade negotiations succeeded in reducing nontariff trade barriers, it could NOT achieve reductions in tariff trade barriers.

Economic sanctions are most effective in pressuring the target country to modify its behavior when the sanctions are imposed by a small number of countries and when the target country had weak economic ties to the imposing countries before the sanctions were initiated.

With the passage of the Smoot-Hawley Act in 1930, U.S.average tariffs were raised to over 50 percent on protected imports.

Under the government procurement policy of the World Trade Organization, federal-state-local governments are prevented from discriminating in favor of the products of domestic suppliers on contracts valued at $1 million and more.

Those who argue in favor of import protection generally give the impression that such restricted trade will