Deck 16: Political Economy and Us Trade Policy

Question 1

If some of a country's resources are devoted to the provision of bribes and other incentives to legislators so as to influence voting behavior on particular policies, these actions __________; the actions are referred to by economists as __________.

A) lead to enhanced production of goods and services in the country rather than simply to a redistribution of income; "directly productive activity"
B) lead to enhanced production of goods and services in the country rather than simply to a redistribution of income; "directly unproductive activity"
C) simply lead to a redistribution of income in the country rather than to enhanced production of goods and services; "directly productive activity"
D) simply lead to a redistribution of income in the country rather than to enhanced production of goods and services; "directly unproductive activity"

Answer 1

D

Question 2

The successful Uruguay Round of trade negotiations transformed the then-existing sponsoring agency into the __________, which began operation in __________.

A) GATT; 1986
B) GATT; 1995
C) WTO; 1990
D) WTO; 1995

Answer 2

D

Question 3

Recent polling work discussed in the text pertaining to attitudes toward international trade suggests that Americans have __________. Another finding is that greater inequality in a country seems to be positively associated with a greater desire __________.

A) a more favorable opinion of the overall benefit of international trade than do citizens of most other countries; to restrict rather than to expand international trade
B) a more favorable opinion of the overall benefit of international trade than do citizens of most other countries; to expand rather than to restrict international trade
C) a less favorable opinion of the overall benefit of international trade than do citizens of many other countries; to restrict rather than to expand international trade
D) a less favorable opinion of the overall benefit of international trade than do citizens of many other countries; to expand rather than to restrict international trade

Answer 3

C

Question 4

Since 1993, the U.S. and the European Union have had a number of disagreements over trade policy. Discuss some of the major disagreements and identify the groups in the U.S. that stand to gain from the policies and those that stand to lose.

Question 5

It is not uncommon to find a voting industry minority being able to put in place trade Policies that benefit that minority at the expense of the majority

A) because perceived consumer benefits are less than the "cost" of voting, leading to Absenteeism of consumers at the polls.
B) because politicians ignore the average voter.
C) because politicians are very often bribed by big business and labor unions.
D) because consumers prefer to "buy American" even if it costs them more.

Question 6

In 2011, final approval by the U.S. Congress was given to free-trade agreements with __________.

A) Colombia, South Korea (Republic of Korea), and Panama
B) Canada, China, and Ecuador
C) China, Dominican Republic, and Panama
D) Colombia, Costa Rica, and South Korea (Republic of Korea)

Question 7

Briefly describe the evolution of U.S. trade policy since the imposition of the famous Smoot-Hawley tariff. What has happened to the level of tariffs over the period? To the level of protection in general?

Question 8

The feature of U.S. trade legislation whereby a negotiated trade agreement (negotiated by The Executive Branch) can only be voted on in a "yea" or "nay" fashion (with no Amendments) by the Congress is known as

A) "fast-track" (or Trade Promotion Authority).
B) MFN treatment (or Normal Trade Relations).
C) the Generalized System of Preferences (GSP).
D) the Offshore Assembly Provisions (or "production sharing").

Question 9

Compare and contrast "rules-based" trade policy with "results-based" trade policy. On which type is the GATT based? Which type is consistent with the "new reciprocity" approach to trade policy?

Question 10

Do you think that the developing countries should be given special, favorable treatment in multilateral trade negotiations? Why or why not? Has such treatment been given to developing countries in the past? Explain.

Question 11

Which of the following is generally thought to have established the highest tariffs in U.S. history?

A) Trade Act of 1974
B) Reciprocal Trade Agreements Act of 1934
C) Tariff Act of 1930 (Smoot-Hawley tariff)
D) General Agreement on Tariffs and Trade

Question 12

The use of a bilateral, item-by-item approach best characterizes which period of trade negotiations?

A) the Kennedy Round
B) the Tokyo Round
C) Reciprocal Trade Agreements negotiations
D) early GATT negotiations after World War II

Question 13

The first U.S. legislation to authorize "adjustment assistance" for workers displaced by tariff reductions was the

A) Reciprocal Trade Agreements Act of 1934.
B) Trade Expansion Act of 1962.
C) Trade Act of 1974.
D) Omnibus Trade and Competitiveness Act of 1988.

Question 14

Small groups may gain at the expense of the majority when

A) voters perceive that there are costs associated with voting.
B) small group solidarity is high and there is little "free-riding" within the groups.
C) the expected consumer benefits from the policies are small on an individual basis.
D) all of the above

Question 15

The average level of tariffs in developing countries, which is __________ the average Level of tariffs in the developed countries, __________ after the conclusion of the Uruguay Round of trade negotiations.

A) lower than; did not change
B) lower than; fell
C) higher than; did not change
D) higher than; fell

Question 16

The concept of "results-based" trade policy

A) is embodied in the "new reciprocity" approach to policy.
B) is consistent with GATT codes and guidelines.
C) is encouraged by policymakers who want the government to be less involved in Managing trade.
D) is encouraged by those who feel that government allocation of resources is less Efficient than market allocation of resources.

Question 17

The World Trade Organization

A) prevents each member country from adopting its own trade policy objectives.
B) is charged with implementing the agreements reached in the Uruguay Round of Trade negotiations.
C) requires its member countries to eliminate all barriers to imports.
D) requires its member countries to adopt common labor standards with respect to And wages working conditions.

Question 18

The most recently successfully completed GATT/WTO "round" or set of multilateral Trade negotiations was the

A) Doha Development Agenda.
B) Uruguay Round.
C) Tokyo Round.
D) Kennedy Round.

Question 19

Briefly outline the focus of the Uruguay Round of trade negotiations, as well as the focus of the Doha Development Agenda.

Question 20

After the implementation of the tariff reductions agreed to in the Uruguay Round of Multilateral trade negotiations, the average level of tariffs in developed countries was __________.

A) 0 percent
B) between 0 percent and 5 percent
C) between 5 percent and 10 percent
D) greater than 10 percent

Question 21

The longstanding arrangement for regulating the flow of imports of textiles and apparel Into developed countries from developing countries was known as __________.

A) the Generalized System of Preferences
B) the Multi-Fiber Arrangement
C) a "fast-track" agreement
D) an outsourcing/offshoring agreement

Question 22

In the Uruguay Round of trade negotiations, the talks originally broke down in 1990 primarily because of the strong disagreement between the United States and the European Community with respect to

A) service restrictions.
B) antidumping provisions.
C) treatment of intellectual property.
D) subsidies and protection in agriculture.

Question 23

In the last 10-15 years, which one of the following sets of goods has NOT been subject to an agreement to limit the amount of imports into the United States?

A) imports of softwood lumber from Canada
B) imports of steel from China
C) imports of hormone-treated beef from the European Union
D) imports of some textile goods from China

Question 24

In late 2003, the Bush administration unilaterally placed temporary import quotas on several textile items imported from __________.

A) the European Union
B) Japan
C) Brazil
D) China

Question 25

An early significant agreement in the negotiations of the Doha Development Agenda that Is of importance to developing countries occurred in the area of

A) agricultural protection.
B) pharmaceuticals pricing.
C) antidumping provisions.
D) environmental protection and sustainable development.