Exam 6: Business-Government Trade Relations

Scenario: Not-So-Free Freeland Freeland is a semi-closed economy whose government believes in protecting national identity and becoming a self-sustaining country. The government's priority is to protect local jobs and provide opportunities to Freeland's emerging industries to flourish without the threat of external competition. -Protection of its emerging industries without an external competitive threat is an example of the ________ argument.

All of the following are true of quotas EXCEPT ________.

A country may impose export quotas to protect its domestic producers from international competition.

A tariff levied as a specific fee for each unit (measured by number, weight, etc.) of an imported product is called a(n) ________ tariff.

The most common economic reason for nations' attempts to influence international trade is preserving national security.

A(n) ________ tariff is levied as a percentage of the stated price of an imported product.

A government guarantee that it will repay the loan of a company if the company should default on repayment is called a(n) ________.

Through the Overseas Private Investment Corporation, companies that invest abroad can insure against loss due to ________.

Which of the following is a political motive behind government intervention in trade?

South Korean global conglomerates are known as guanxi.

Which of the following is NOT a reason why governments impose restrictions on free trade?

A government may impose import quotas to force companies from other nations to compete against one another for the limited amount of imports allowed.

All of the following are methods of restricting trade EXCEPT ________.

Briefly describe each method governments use to restrict trade.

Scenario: Excelsior's Limited Excelsior's Limited, a maker of health and beauty aids, is expanding its presence in several countries around the world. Excelsior's president has been surprised at some of the responses the company has received from other countries. -France gave Excelsior's Limited permission to export its product as long as the company obtained a special license first. Excelsior has been waiting six months for the license and is wondering if it will ever arrive. Excelsior's Limited is experiencing ________.

Which of the following is a method of restricting trade?

A lower tariff rate for a certain quantity of imports and a higher rate for quantities that exceed the quota is referred to as a(n) ________.

The Uruguay Round of Negotiations modified the original General Agreement on Tariffs and Trade (GATT) treaty in all of the following ways EXCEPT ________.

For which of the following reasons do countries levy tariffs?

Explain the concept of subsidies and how they are used. What are their disadvantages?