Question 1

Voluntary export restraints are commonly used in what industry?

Accepted Answer

A)  finance 
B)  furniture 
C)  agriculture 
D)  media 
E)  education

Question 2

What was the impetus for the Omnibus Trade and Competitiveness Act?

Accepted Answer

A)  Markets in the U.S. were open to most of the world but markets in Europe and many Asian countries were relatively closed. 
B)  The U.S. market was relatively closed to the rest of the world. 
C)  Markets in the U.S. were being driven by foreign demand. 
D)  The trade volume in the U.S. was declining. 
E)  Markets in the U.S. were trading with partners based on how they hoped they would respond rather than how they actually operated.

Question 3

The marketing manager for Glorious Products wants to export the company's line of fashion boots to an EU country. However, she discovers that there is a complete restriction on the import of any form of leather into that country. This is an example of

Accepted Answer

A)  an orderly market agreement. 
B)  a quota. 
C)  a monetary barrier. 
D)  a voluntary export restraint. 
E)  a boycott.

Question 4

One country refuses to sell goods to its neighboring country based on the belief that the neighboring country harbors radicals and terrorists. In this case, the refusal is referred to as a(n)

Accepted Answer

A)  antidumping penalty. 
B)  embargo. 
C)  monetary barrier. 
D)  orderly market agreement. 
E)  voluntary export restraint.

Question 5

Antidumping laws encourage foreign producers to sell their products at a higher cost than the cost of production and create more opportunities for free trade.

Accepted Answer

A) True 
 B)False

Question 6

What market barriers led to the creation of the International Monetary Fund?

Accepted Answer

A)  trade embargoes 
B)  inflation and recession in Europe 
C)  new taxing bodies governing trade 
D)  inadequate monetary reserves and unstable currencies 
E)  export quotas and higher tariffs

Question 7

The United States and other countries require some products (automobiles in particular) to contain a percentage of "local content" to gain admission to their markets. This is an example of the stringent usage of ________ to restrict trade.

Accepted Answer

A)  exchange permits 
B)  embargoes 
C)  blocked currencies 
D)  standards 
E)  antidumping penalties

Question 8

Tariffs are often used as reprisals against protectionist moves of trading partners.

Accepted Answer

A) True 
 B)False

Question 9

What was the most apparent reciprocal impact of the foreign economic assistance given by the United States following World War II?

Accepted Answer

A)  European countries formed an alliance to counter the OPEC countries' clout. 
B)  Outflow of labor to the recipient countries increased dramatically. 
C)  All recipient countries appointed Americans to manage their central banks. 
D)  Purchases of U.S. agricultural products, manufactured goods, and services by the recipient countries increased. 
E)  Distribution of economic power and potential became more uneven.

Question 10

After World War II, the United States led efforts to provide financial and industrial development assistance to rebuild Japan and channeled funds to foster economic growth in the underdeveloped world. These efforts were primarily aimed at

Accepted Answer

A)  halting the growth of Nazi Germany. 
B)  dampening the spread of communism. 
C)  dampening the spread of capitalism. 
D)  building a stronger defense force. 
E)  creating a worldwide trade bloc to counter the OPEC countries' clout.

Question 11

Name three things that can be restricted when tariffs are imposed.

Accepted Answer

The answer of Name three things that can be restricted...

Question 12

How are WTO decisions enforced?

Accepted Answer

A)  All WTO decisions are enforceable under law. 
B)  Member nations pay a duty to join WTO and this creates natural compliance. 
C)  The World Court reviews and enforces all WTO decisions. 
D)  International pressure to comply with WTO decisions is expected to force compliance. 
E)  Decisions must pass through both houses of Congress to be enforced.

Question 13

Following World War II, it is noted that the West created the trade patterns. This was especially true in which one of the following?

Accepted Answer

A)  North America 
B)  Europe 
C)  South America 
D)  Asia 
E)  Central America

Question 14

What strategy was employed by the United States to regain its lost market share for capital goods by the late 1990s?

Accepted Answer

A)  funding the competitive developing nations 
B)  restructuring its industries to be more "lean and mean" 
C)  decreasing its exports and increasing its imports 
D)  raising average U.S. tariffs on more than 20,000 imported goods by 60 percent 
E)  provoking increased protectionism from other countries

Question 15

The special drawing rights (SDRs) developed by the IMF can be thought of as

Accepted Answer

A)  black gold. 
B)  exchange permits. 
C)  floating currencies. 
D)  paper gold. 
E)  virtual dollars.

Question 16

What occurs in the balance of payments account when international payments are greater than receipts?

Accepted Answer

A)  a tariff 
B)  inflation 
C)  recession 
D)  a credit 
E)  a deficit

Question 17

Rishi, a protectionist, has seen several small businesses go bankrupt because they were unable to compete with the cheaper prices of goods provided by foreign companies. The cell-phone manufacturing industry has just started in the United Kingdom, and Rishi's company is one of the first to try its hand at cell-phone manufacturing. What argument is most likely to be used by Rishi to persuade his government to restrict the import of foreign cell phones from foreign companies?

Accepted Answer

A)  protection of an infant industry 
B)  the need to keep money at home 
C)  conservation of natural resources 
D)  national defense 
E)  maintenance of standard of living

Question 18

In general, economists do not recognize "protection of the home market" as a valid argument for protectionist measures.

Accepted Answer

A) True 
 B)False

Question 19

As both special drawing rights (SDRs) and the U.S. dollar have lost their utility as the basic medium of financial exchange, most monetary statistics relate to gold and silver rather than dollars.

Accepted Answer

A) True 
 B)False

Question 20

Which were the two major challenges faced by U.S. multinational corporations at the close of the 1960s?

Accepted Answer

A)  the creation of the Soviet Union and the higher tariffs on imports 
B)  growing jingoistic nationalism and a negative population growth rate in major international markets 
C)  resistance to direct investment and increasing competition in export markets 
D)  increasing Chinese domination in the manufacturing sector and the falling dollar in global markets 
E)  the decreased demand for U.S. goods in the global market and the growing influence of consumer rights advocacy in the home market

Exam 2: The Dynamic Environment of International Trade

Voluntary export restraints are commonly used in what industry?

What was the impetus for the Omnibus Trade and Competitiveness Act?

The marketing manager for Glorious Products wants to export the company's line of fashion boots to an EU country. However, she discovers that there is a complete restriction on the import of any form of leather into that country. This is an example of

One country refuses to sell goods to its neighboring country based on the belief that the neighboring country harbors radicals and terrorists. In this case, the refusal is referred to as a(n)

Antidumping laws encourage foreign producers to sell their products at a higher cost than the cost of production and create more opportunities for free trade.

What market barriers led to the creation of the International Monetary Fund?

The United States and other countries require some products (automobiles in particular) to contain a percentage of "local content" to gain admission to their markets. This is an example of the stringent usage of ________ to restrict trade.

Tariffs are often used as reprisals against protectionist moves of trading partners.

What was the most apparent reciprocal impact of the foreign economic assistance given by the United States following World War II?

After World War II, the United States led efforts to provide financial and industrial development assistance to rebuild Japan and channeled funds to foster economic growth in the underdeveloped world. These efforts were primarily aimed at

Name three things that can be restricted when tariffs are imposed.

How are WTO decisions enforced?

Following World War II, it is noted that the West created the trade patterns. This was especially true in which one of the following?

What strategy was employed by the United States to regain its lost market share for capital goods by the late 1990s?

The special drawing rights (SDRs) developed by the IMF can be thought of as

What occurs in the balance of payments account when international payments are greater than receipts?

In general, economists do not recognize "protection of the home market" as a valid argument for protectionist measures.

As both special drawing rights (SDRs) and the U.S. dollar have lost their utility as the basic medium of financial exchange, most monetary statistics relate to gold and silver rather than dollars.

Which were the two major challenges faced by U.S. multinational corporations at the close of the 1960s?