Question 1

The purpose of the countervailing duty is to

Accepted Answer

A)  increase the price of the imported good. 
B)  decrease the price of the imported good. 
C)  increase the price of the exported good. 
D)  decrease the price of the exported good. 
A)  increase the price of the imported good. 
B)  decrease the price of the imported good. 
C)  increase the price of the exported good. 
D)  decrease the price of the exported good.

Question 2

The World Trade Organization

Accepted Answer

A)  consists of the World Bank and the International Monetary Fund. 
B)  is intended to promote bilateral trade negotiations between two countries. 
C)  attempts to use world trade rules to help resolve trade disputes among member countries. 
D)  promotes international trade by granting loan guarantees to foreign customers who make purchases on credit. 
A)  consists of the World Bank and the International Monetary Fund. 
B)  is intended to promote bilateral trade negotiations between two countries. 
C)  attempts to use world trade rules to help resolve trade disputes among member countries. 
D)  promotes international trade by granting loan guarantees to foreign customers who make purchases on credit.

Question 3

According to U.S.trade law, the escape clause provides relief to U.S.firms that experience unfair foreign competition.

Accepted Answer

A) True 
 B)False

Question 4

U.S.antidumping duties are intended to neutralize exports to the United States at prices below average total cost or exports to the United States at prices lower than those charged in the exporter's home market.

Accepted Answer

A) True 
 B)False

Question 5

According to the strategic trade policy hypothesis, government can alter the terms of competition to favor domestic companies, thus increasing their profits at the expense of their rivals.

Accepted Answer

A) True 
 B)False

Question 6

Concerning U.S.tariff policy, the Generalized System of Preferences allows

Accepted Answer

A)  imports from selected developing countries to receive preferential tariff treatment. 
B)  imports from all developing countries to receive preferential tariff treatment. 
C)  U.S. exports to selected developing countries to receive preferential tariff treatment. 
D)  U.S. exports to all developing countries to receive preferential tariff treatment. 
A)  imports from selected developing countries to receive preferential tariff treatment. 
B)  imports from all developing countries to receive preferential tariff treatment. 
C)  U.S. exports to selected developing countries to receive preferential tariff treatment. 
D)  U.S. exports to all developing countries to receive preferential tariff treatment.

Question 7

Under the normal-trade-relations (most-favored-nation) principle, two nations agree to apply tariffs to each other at rates as low as those applied to any other nation.

Accepted Answer

A) True 
 B)False

Question 8

Critics of the World Trade Organization (WTO) argue that liberalized trade can result in environmental degradation and business firms avoiding labor protections such as collective bargaining rights and workplace safety.

Accepted Answer

A) True 
 B)False

Question 9

The Smoot-Hawley Tariff Act of 1930 has generally been associated with

Accepted Answer

A)  falling tariffs. 
B)  increases in the volume of trade. 
C)  intensifying the worldwide depression. 
D)  efforts to liberalize nontariff trade barriers. 
A)  falling tariffs. 
B)  increases in the volume of trade. 
C)  intensifying the worldwide depression. 
D)  efforts to liberalize nontariff trade barriers.

Question 10

According to the normal-trade-relations (most-favored-nation (MFN)) principle, if the United States extends MFN treatment to China and then grants a low tariff on imports of shirts from South Korea, the United States is obligated to provide the identical low tariff on imports of shirts from China.

Accepted Answer

A) True 
 B)False

Question 11

Industrial policy attempts to fulfill all of the following objectives EXCEPT

Accepted Answer

A)  improving the infrastructure for an industry. 
B)  easing transitions for workers in declining industries. 
C)  supporting troubled industries if the difficulty is temporary. 
D)  fostering industries that offer long-run comparative disadvantage. 
A)  improving the infrastructure for an industry. 
B)  easing transitions for workers in declining industries. 
C)  supporting troubled industries if the difficulty is temporary. 
D)  fostering industries that offer long-run comparative disadvantage.

Question 12

Regarding the overall welfare of an importing country, dumping is beneficial to the country.

Accepted Answer

A) True 
 B)False

Question 13

Soon after the United States implemented the Smoot-Hawley Tariff Act of 1930

Accepted Answer

A)  the volume of international trade dramatically increased. 
B)  employment in the United States rapidly increased. 
C)  about 25 countries levied import tariffs on U.S. products. 
D)  the world returned to a policy of free trade. 
A)  the volume of international trade dramatically increased. 
B)  employment in the United States rapidly increased. 
C)  about 25 countries levied import tariffs on U.S. products. 
D)  the world returned to a policy of free trade.

Question 14

Figure 6.2 illustrates the calculator market for Mexico, assumed to be a small nation that is unable to influence the South Korean (world) price. Assume the South Korean price to be $60 per calculator.
Figure 6.2. Effects of an Export Subsidy  
-Consider Figure 6.2.To help its firms further penetrate export markets, suppose the South Korean government provides them a production subsidy of $20 per calculator.With the subsidy, South Korean firms charge a price of $______________ and export ______________ calculators to Mexico.

Accepted Answer

A)  $40, 8 
B)  $40, 10 
C)  $20, 8 
D)  $20, 10 
A)  $40, 8 
B)  $40, 10 
C)  $20, 8 
D)  $20, 10

Question 15

As a condition for the World Trade Organization's enactment of new policies, developing countries pressure the World Trade Organization for

Accepted Answer

A)  more stringent environmental-protection policies in advanced countries. 
B)  additional expenditures on policies to protect intellectual property. 
C)  import tariff reductions in advanced countries. 
D)  domestic content laws in advanced countries. 
A)  more stringent environmental-protection policies in advanced countries. 
B)  additional expenditures on policies to protect intellectual property. 
C)  import tariff reductions in advanced countries. 
D)  domestic content laws in advanced countries.

Question 16

Under U.S.trade law, foreign export subsidies and dumping are illegal in American markets.

Accepted Answer

A) True 
 B)False

Question 17

The Uruguay Round of Multilateral Trade Negotiations accomplished all EXCEPT which of the following?

Accepted Answer

A)  placed primary emphasis on nontariff trade barriers 
B)  estimated to yield modest gains in world output and employment 
C)  achieved cuts in tariffs but not in nontariff trade barriers 
D)  abolished all barriers to trade in agricultural products 
A)  placed primary emphasis on nontariff trade barriers 
B)  estimated to yield modest gains in world output and employment 
C)  achieved cuts in tariffs but not in nontariff trade barriers 
D)  abolished all barriers to trade in agricultural products

Question 18

Figure 6.2 illustrates the calculator market for Mexico, assumed to be a small nation that is unable to influence the South Korean (world) price. Assume the South Korean price to be $60 per calculator.
Figure 6.2. Effects of an Export Subsidy  
-Consider Figure 6.2.As a result of the South Korean subsidy, Mexicans find their consumer surplus

Accepted Answer

A)  rising by $160. 
B)  rising by $220. 
C)  falling by $160. 
D)  falling by $220. 
A)  rising by $160. 
B)  rising by $220. 
C)  falling by $160. 
D)  falling by $220.

Question 19

The U.S."trade-remedy laws" could establish all of the following EXCEPT

Accepted Answer

A)  import tariffs to protect U.S. firms seriously injured by foreign competition. 
B)  countervailing duties that neutralize foreign export subsidies. 
C)  antidumping duties that protect U.S. firms from imports sold at less-than-fair-value. 
D)  economic sanctions levied against hostile nations. 
A)  import tariffs to protect U.S. firms seriously injured by foreign competition. 
B)  countervailing duties that neutralize foreign export subsidies. 
C)  antidumping duties that protect U.S. firms from imports sold at less-than-fair-value. 
D)  economic sanctions levied against hostile nations.

Question 20

The purpose of "countervailing duties," as levied by the domestic government, is to neutralize import tariffs imposed by foreign governments.

Accepted Answer

A) True 
 B)False

The purpose of the countervailing duty is to

The World Trade Organization

According to U.S.trade law, the escape clause provides relief to U.S.firms that experience unfair foreign competition.

U.S.antidumping duties are intended to neutralize exports to the United States at prices below average total cost or exports to the United States at prices lower than those charged in the exporter's home market.

According to the strategic trade policy hypothesis, government can alter the terms of competition to favor domestic companies, thus increasing their profits at the expense of their rivals.

Concerning U.S.tariff policy, the Generalized System of Preferences allows

Under the normal-trade-relations (most-favored-nation) principle, two nations agree to apply tariffs to each other at rates as low as those applied to any other nation.

Critics of the World Trade Organization (WTO) argue that liberalized trade can result in environmental degradation and business firms avoiding labor protections such as collective bargaining rights and workplace safety.

The Smoot-Hawley Tariff Act of 1930 has generally been associated with

According to the normal-trade-relations (most-favored-nation (MFN)) principle, if the United States extends MFN treatment to China and then grants a low tariff on imports of shirts from South Korea, the United States is obligated to provide the identical low tariff on imports of shirts from China.

Industrial policy attempts to fulfill all of the following objectives EXCEPT

Regarding the overall welfare of an importing country, dumping is beneficial to the country.

Soon after the United States implemented the Smoot-Hawley Tariff Act of 1930

As a condition for the World Trade Organization's enactment of new policies, developing countries pressure the World Trade Organization for

Under U.S.trade law, foreign export subsidies and dumping are illegal in American markets.

The Uruguay Round of Multilateral Trade Negotiations accomplished all EXCEPT which of the following?

The U.S."trade-remedy laws" could establish all of the following EXCEPT

The purpose of "countervailing duties," as levied by the domestic government, is to neutralize import tariffs imposed by foreign governments.

The International Economy and Globalization

Foundations of Modern Trade Theory Comparative Advantage

Sources of Comparative Advantage

Tariffs

Nontariff Trade Barriers

Trade Policies for the Developing Nations

Regional Trading Arrangements

International Factor Movements and Multinational Enterprises

The Balance of Payments

Foreign Exchange

Exchange Rate Determination

Mechanisms of International Adjustment

Exchange Rate Adjustments and the Balance of Payments

Exchange Rate Systems and Currency Crises

Filters

Exam 6: Trade Regulations and Industrial Policies

The purpose of the countervailing duty is to

The World Trade Organization

According to U.S.trade law, the escape clause provides relief to U.S.firms that experience unfair foreign competition.

U.S.antidumping duties are intended to neutralize exports to the United States at prices below average total cost or exports to the United States at prices lower than those charged in the exporter's home market.

According to the strategic trade policy hypothesis, government can alter the terms of competition to favor domestic companies, thus increasing their profits at the expense of their rivals.

Concerning U.S.tariff policy, the Generalized System of Preferences allows

Under the normal-trade-relations (most-favored-nation) principle, two nations agree to apply tariffs to each other at rates as low as those applied to any other nation.

Critics of the World Trade Organization (WTO) argue that liberalized trade can result in environmental degradation and business firms avoiding labor protections such as collective bargaining rights and workplace safety.

The Smoot-Hawley Tariff Act of 1930 has generally been associated with

According to the normal-trade-relations (most-favored-nation (MFN)) principle, if the United States extends MFN treatment to China and then grants a low tariff on imports of shirts from South Korea, the United States is obligated to provide the identical low tariff on imports of shirts from China.

Industrial policy attempts to fulfill all of the following objectives EXCEPT

Regarding the overall welfare of an importing country, dumping is beneficial to the country.

Soon after the United States implemented the Smoot-Hawley Tariff Act of 1930

As a condition for the World Trade Organization's enactment of new policies, developing countries pressure the World Trade Organization for

Under U.S.trade law, foreign export subsidies and dumping are illegal in American markets.

The Uruguay Round of Multilateral Trade Negotiations accomplished all EXCEPT which of the following?

The U.S."trade-remedy laws" could establish all of the following EXCEPT

The purpose of "countervailing duties," as levied by the domestic government, is to neutralize import tariffs imposed by foreign governments.

The International Economy and Globalization

Foundations of Modern Trade Theory Comparative Advantage

Sources of Comparative Advantage

Tariffs

Nontariff Trade Barriers

Trade Policies for the Developing Nations

Regional Trading Arrangements

International Factor Movements and Multinational Enterprises

The Balance of Payments

Foreign Exchange

Exchange Rate Determination

Mechanisms of International Adjustment

Exchange Rate Adjustments and the Balance of Payments

Exchange Rate Systems and Currency Crises

Filters