Question 1

Which statements accurately describes the General Agreement on Tariffs and Trade (GATT)?

Accepted Answer

A)  The United States, the United Kingdom, and Germany were the only signatories of the original GATT. 
B)  The original agreement provided a process to increase the tariffs on trade goods. 
C)  GATT member nations seek to resolve their trade disputes unilaterally. 
D)  The GATT panels have enforcement powers apart from advisory powers. 
E)  It created an agency to serve as watchdog over world trade.

Question 2

Why did the Smoot-Hawley Act play a role in sending the world's economies into the Great Depression?

Accepted Answer

A)  It encouraged the majority of world economies to lower tariffs to imported goods. 
B)  It raised U.S. tariffs on thousands of imported goods by more than 60 percent. 
C)  It created an embargo on all agricultural products. 
D)  It divided the United States into factions based on race. 
E)  It forced independent countries to band together to stay economically viable.

Question 3

__________ are becoming a popular way to circumvent WTO guidelines and impose new duties.

Accepted Answer

A)  Antidumping duties 
B)  Basic excise duties 
C)  Special excise duties 
D)  Production taxes 
E)  Manufacturing taxes

Question 4

________ pricing is the practice whereby a foreign producer intentionally sells its products in the United States for less than the cost of production to undermine the competition and take control of the market.

Accepted Answer

A)  Basing point 
B)  Spot 
C)  Defensive 
D)  Counterpoint 
E)  Predatory

Question 5

When foreign currencies can be traded for more dollars, U.S. products and companies are more expensive for the foreign customer and exports decrease.

Accepted Answer

A) True 
 B)False

Question 6

Describe the cost to the consumer when protectionist measures are in place.

Accepted Answer

The answer of Describe the cost to the consumer when...

Question 7

Developed by the International Monetary Fund to cope with universally floating exchange rates, ________ represent an average base of value derived from the value of a group of major currencies.

Accepted Answer

A)  exchange permits 
B)  special drawing rights 
C)  floating currencies 
D)  gold rates 
E)  dollar parities

Question 8

What is a tariff?

Accepted Answer

A)  It is a tax levied by a government on goods being exported out of the country. 
B)  It is a tax paid by individual states to the federal government for goods transferred across state lines. 
C)  It is a tax imposed by a government on goods that are imported into the country. 
D)  It is a limit on the amount of goods that can be imported into the country. 
E)  It is a limit on the amount of goods that can be exported out of the country.

Question 9

If a country decided to refuse to allow an importer to exchange its national currency for the sellers' currency, it would be an example of a(n) ________ currency.

Accepted Answer

A)  blocked 
B)  spot 
C)  embargo 
D)  taxed 
E)  quota

Question 10

Establishing a tariff on fabrics imported from Uruguay so that U.S. manufacturers sell more fabrics is an example of a protectionist measure.

Accepted Answer

A) True 
 B)False

Question 11

Compare the U.S. position in world trade today to when Servan-Schreiber warned Europe about U.S. multinational domination.

Accepted Answer

The answer of Compare the U.S. position in world trade...

Question 12

A boycott on importing produce from Mexico would be an example of a

Accepted Answer

A)  compound duty. 
B)  revenue tariff. 
C)  nontariff barrier. 
D)  specific duty. 
E)  quota embargo.

Question 13

The ________ of the balance-of-payments statement is used to record increases or decreases in foreign exchange and increases or decreases in liabilities to foreign central banks.

Accepted Answer

A)  current account 
B)  capital account 
C)  credit account 
D)  receivables account 
E)  reserves account

Question 14

The rapid growth of war-torn economies and previously underdeveloped countries, coupled with large-scale economic cooperation and assistance that followed World War II, led to

Accepted Answer

A)  the rise of new global marketing opportunities. 
B)  the decrease in demand for American goods worldwide. 
C)  the dissolution of GATT. 
D)  the spread of communism by the United States. 
E)  the sharp reduction in the production capacity of the United States.

Question 15

By the year 1971, the United States was selling less to other countries than it bought from them; that is, the United States had a trade deficit.

Accepted Answer

A) True 
 B)False

Question 16

What trade policy tool makes it mandatory for its importers who want to buy a foreign good to apply for an exchange permit?

Accepted Answer

A)  tariff 
B)  import quota 
C)  blocked currency 
D)  government approval 
E)  export levy

Question 17

_________ and the World Bank Group are two global institutions created primarily to assist nations in becoming and remaining economically viable.

Accepted Answer

A)  Amnesty International 
B)  The World Court 
C)  The International Monetary Fund 
D)  The International Red Cross 
E)  The International Federation of Blue Cross

Question 18

In the last few years, most of the countries of the world saw a dramatic slowdown in the growth of their economies with the exception of

Accepted Answer

A)  the United States. 
B)  Spain. 
C)  China. 
D)  Greece. 
E)  France.

Question 19

What is used to ensure that balance-of-payments records are always in balance?

Accepted Answer

A)  sum of squares recording system 
B)  bank reconciliation system 
C)  double-entry bookkeeping system 
D)  archival records system 
E)  multifactor recording system

Question 20

A nation's balance-of-payments statement records all financial transactions between its residents and those of the rest of the world during a given period of time.

Accepted Answer

A) True 
 B)False

Exam 2: The Dynamic Environment of International Trade

Which statements accurately describes the General Agreement on Tariffs and Trade (GATT) ?

Why did the Smoot-Hawley Act play a role in sending the world's economies into the Great Depression?

__________ are becoming a popular way to circumvent WTO guidelines and impose new duties.

________ pricing is the practice whereby a foreign producer intentionally sells its products in the United States for less than the cost of production to undermine the competition and take control of the market.

When foreign currencies can be traded for more dollars, U.S. products and companies are more expensive for the foreign customer and exports decrease.

Describe the cost to the consumer when protectionist measures are in place.

Developed by the International Monetary Fund to cope with universally floating exchange rates, ________ represent an average base of value derived from the value of a group of major currencies.

What is a tariff?

If a country decided to refuse to allow an importer to exchange its national currency for the sellers' currency, it would be an example of a(n) ________ currency.

Establishing a tariff on fabrics imported from Uruguay so that U.S. manufacturers sell more fabrics is an example of a protectionist measure.

Compare the U.S. position in world trade today to when Servan-Schreiber warned Europe about U.S. multinational domination.

A boycott on importing produce from Mexico would be an example of a

The ________ of the balance-of-payments statement is used to record increases or decreases in foreign exchange and increases or decreases in liabilities to foreign central banks.

The rapid growth of war-torn economies and previously underdeveloped countries, coupled with large-scale economic cooperation and assistance that followed World War II, led to

By the year 1971, the United States was selling less to other countries than it bought from them; that is, the United States had a trade deficit.

What trade policy tool makes it mandatory for its importers who want to buy a foreign good to apply for an exchange permit?

_________ and the World Bank Group are two global institutions created primarily to assist nations in becoming and remaining economically viable.

In the last few years, most of the countries of the world saw a dramatic slowdown in the growth of their economies with the exception of

What is used to ensure that balance-of-payments records are always in balance?

A nation's balance-of-payments statement records all financial transactions between its residents and those of the rest of the world during a given period of time.