Question 1

Which of the following is a trade policy instrument that the GATT and WTO have been most successful in limiting?

Accepted Answer

A)  local content requirements
B)  tariffs
C)  subsidies
D)  voluntary export restraints
E)  import quotas

Question 2

The Smoot-Hawley Act aimed to liberalize trade by eliminating tariffs,subsidies,and import quotas.

Accepted Answer

A) True 
 B)False

Question 3

According to Alexander Hamilton,governments must temporarily support new industries until they have grown strong enough to meet international competition.

Accepted Answer

A) True 
 B)False

Question 4

One of the main reasons why many economists remain critical of the infant industry argument is its reliance on the assumption that

Accepted Answer

A)  protection of manufacturing from foreign competition is harmful.
B)  absolute advantage cannot sustain productivity of an industry.
C)  foreign firms too come under the definition of infant industry when they newly enter a foreign market.
D)  firms are unable to make efficient long-term investments by borrowing money from the domestic or international capital markets.
E)  foreign competition will eventually cause domestic firms to improve the quality of their products.

Question 5

Paul Krugman argues that although strategic trade policy looks unappealing in theory,in practice it is most likely to be workable.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements is true regarding GATT?

Accepted Answer

A)  GATT attempted to liberalize trade restrictions in one go.
B)  In its early years,GATT was unsuccessful and hence was superseded by the World Bank.
C)  GATT regulations were mostly enforced by the EU nations rather than by a mutual monitoring mechanism.
D)  Tariff reductions through negotiations were completed in three rounds.
E)  The last round for tariff reduction,the Uruguay Round,was launched in 1986 and completed in December 1993.

Question 7

Which of the following is considered to be the ultimate objective of antidumping policies?

Accepted Answer

A)  protecting consumers from high prices
B)  preventing domestic firms from unloading their excess production in domestic markets
C)  protecting domestic producers from unfair foreign competition
D)  protecting consumers from substandard and hazardous products
E)  preventing foreign products from entering domestic market

Question 8

Antidumping actions seem to be concentrated in certain sectors of the economy such as basic metal industries (e.g.,aluminum and steel),chemicals,plastics,and machinery and electrical equipment.

Accepted Answer

A) True 
 B)False

Question 9

Import tariffs protect domestic producers against foreign competitors.

Accepted Answer

A) True 
 B)False

Question 10

Bilateral voluntary export restraints,or VERs,circumvented GATT agreements,because

Accepted Answer

A)  these nations withdrew their membership to the GATT.
B)  the member nations had ceased to recognize GATT as a regulatory body for international trade.
C)  VERs were not a recognized trade barrier under the GATT constitution.
D)  neither the importing country nor the exporting country complained to the GATT bureaucracy for it to take action.
E)  member nations erected a wall of tariff barriers.

Question 11

Describe briefly,with examples,the use of trade policies by governments to support their foreign policy objectives.

Accepted Answer

Governments sometimes use trade policy t...

Question 12

Why is retaliation by government intervention a risky strategy?

Accepted Answer

A)  It encourages dumping by foreign companies.
B)  It could result in increased tariff barriers by the country that is being pressured.
C)  It may expose certain industries that are important for national security to foreign competition.
D)  It allows firms to sell goods in the foreign market at below their fair market value.
E)  It makes it difficult for domestic firms to make any investments by borrowing money from the domestic capital market.

Question 13

Which of the following groups benefits the most from the imposition of tariffs?

Accepted Answer

A)  domestic producers
B)  consumers
C)  exporters and importers
D)  foreign producers
E)  international bodies such as WTO

Question 14

The WTO's Agreement on which of the following is an attempt to narrow the gaps in the way intellectual property rights are protected around the world and to bring them under common international rules?

Accepted Answer

A)  Intellectual Property Rights Enforcement Directive (IPRE
D)  
B)  Court of Arbitration of Intellectual Property (CAIP) 
C)  Trade-Related Aspects of Intellectual Property Rights (TRIPS) 
D)  Intellectual Property Rights Enforcement and Resolution (IPER) 
E)  International Body on Intellectual Property (IBIP)

Question 15

The country of Cadmia,which is a leading producer of bauxite,had to impose trade sanctions on Cerian soda cans in order to get the government of Ceria to enforce export restraints.This imposition by the Cadmian government was undertaken to protect domestic producers of soda cans.Which of the following government intervention is being used by Cadmia?

Accepted Answer

A)  diversification
B)  deregulation
C)  retaliation
D)  liberalization
E)  monopolization

Question 16

According to Krugman,which of the following best indicates the dangers of a strategic trade policy?

Accepted Answer

A)  decrease in subsidies
B)  decrease in protectionism
C)  occurrence of a trade war
D)  huge financial debts for the countries involved
E)  occurrence of a global recession

Question 17

Which of the following is most likely to be an objective of export tariffs?

Accepted Answer

A)  abiding by the rules enforced by the WTO
B)  curbing the competition offered by foreign firms to domestic firms
C)  reducing exports from a sector,often for political reasons
D)  maintaining a positive trade deficit
E)  increasing the flow of capital in the international market

Question 18

Dumping is variously defined as selling goods in a foreign market at below their costs of production,or as selling goods in a foreign market at below their "fair" market value.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is true regarding the difference between GATT and WTO?

Accepted Answer

A)  The WTO was encouraged to extend its reach to encompass regulations governing foreign direct investment unlike GATT.
B)  WTO operates on the basis of consensus unlike GATT.
C)  GATT gives trading partners the right to compensation or,in the last resort,to impose (commensurate) trade sanctions unlike WTO.
D)  GATT's verdict is binding unlike that of WTO's.
E)  WTO allows member-countries to block adoption of arbitration reports unlike GATT.

Question 20

The Smoot-Hawley Act had a damaging effect on

Accepted Answer

A)  the balance-of-payment of the United States.
B)  cash flow in the domestic economy of the United States.
C)  prices of natural resources in the United States.
D)  employment abroad.
E)  accrued liabilities of the United States.

Exam 7: Government Policy and International Trade

Paul Krugman argues that although strategic trade policy looks unappealing in theory,in practice it is most likely to be workable.

Correct Answer
verified

According to Krugman,which of the following best indicates the dangers of a strategic trade policy?

Correct Answer
verified

The Smoot-Hawley Act had a damaging effect on

Correct Answer
verified

The WTO's Agreement on which of the following is an attempt to narrow the gaps in the way intellectual property rights are protected around the world and to bring them under common international rules?

Correct Answer
verified

Correct Answer
verified

Which of the following groups benefits the most from the imposition of tariffs?

Correct Answer
verified

The Smoot-Hawley Act aimed to liberalize trade by eliminating tariffs,subsidies,and import quotas.

Correct Answer
verified

Bilateral voluntary export restraints,or VERs,circumvented GATT agreements,because

Correct Answer
verified

Which of the following is a trade policy instrument that the GATT and WTO have been most successful in limiting?

Correct Answer
verified

According to Alexander Hamilton,governments must temporarily support new industries until they have grown strong enough to meet international competition.

Correct Answer
verified

One of the main reasons why many economists remain critical of the infant industry argument is its reliance on the assumption that

Correct Answer
verified

Dumping is variously defined as selling goods in a foreign market at below their costs of production,or as selling goods in a foreign market at below their "fair" market value.

Correct Answer
verified

Import tariffs protect domestic producers against foreign competitors.

Correct Answer
verified

Which of the following is most likely to be an objective of export tariffs?

Correct Answer
verified

Describe briefly,with examples,the use of trade policies by governments to support their foreign policy objectives.

Correct Answer
verified
Governments sometimes use trade policy t...
View Answer

Which of the following is considered to be the ultimate objective of antidumping policies?

Correct Answer
verified

Antidumping actions seem to be concentrated in certain sectors of the economy such as basic metal industries (e.g.,aluminum and steel),chemicals,plastics,and machinery and electrical equipment.

Correct Answer
verified

Why is retaliation by government intervention a risky strategy?

Correct Answer
verified

Which of the following is true regarding the difference between GATT and WTO?

Correct Answer
verified

Which of the following statements is true regarding GATT?

Correct Answer
verified

Exam 7: Government Policy and International Trade

Paul Krugman argues that although strategic trade policy looks unappealing in theory,in practice it is most likely to be workable.

Correct AnswerverifiedShow Answer

According to Krugman,which of the following best indicates the dangers of a strategic trade policy?

Correct AnswerverifiedShow Answer

The Smoot-Hawley Act had a damaging effect on

Correct AnswerverifiedShow Answer

The WTO's Agreement on which of the following is an attempt to narrow the gaps in the way intellectual property rights are protected around the world and to bring them under common international rules?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following groups benefits the most from the imposition of tariffs?

Correct AnswerverifiedShow Answer

The Smoot-Hawley Act aimed to liberalize trade by eliminating tariffs,subsidies,and import quotas.

Correct AnswerverifiedShow Answer

Bilateral voluntary export restraints,or VERs,circumvented GATT agreements,because

Correct AnswerverifiedShow Answer

Which of the following is a trade policy instrument that the GATT and WTO have been most successful in limiting?

Correct AnswerverifiedShow Answer

According to Alexander Hamilton,governments must temporarily support new industries until they have grown strong enough to meet international competition.

Correct AnswerverifiedShow Answer

One of the main reasons why many economists remain critical of the infant industry argument is its reliance on the assumption that

Correct AnswerverifiedShow Answer

Dumping is variously defined as selling goods in a foreign market at below their costs of production,or as selling goods in a foreign market at below their "fair" market value.

Correct AnswerverifiedShow Answer

Import tariffs protect domestic producers against foreign competitors.

Correct AnswerverifiedShow Answer

Which of the following is most likely to be an objective of export tariffs?

Correct AnswerverifiedShow Answer

Describe briefly,with examples,the use of trade policies by governments to support their foreign policy objectives.

Correct AnswerverifiedGovernments sometimes use trade policy t...View AnswerShow Answer

Which of the following is considered to be the ultimate objective of antidumping policies?

Correct AnswerverifiedShow Answer

Antidumping actions seem to be concentrated in certain sectors of the economy such as basic metal industries (e.g.,aluminum and steel),chemicals,plastics,and machinery and electrical equipment.

Correct AnswerverifiedShow Answer

Why is retaliation by government intervention a risky strategy?

Correct AnswerverifiedShow Answer

Which of the following is true regarding the difference between GATT and WTO?

Correct AnswerverifiedShow Answer

Which of the following statements is true regarding GATT?

Correct AnswerverifiedShow Answer

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Correct Answer
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Governments sometimes use trade policy t...
View Answer

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Correct Answer
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Correct Answer
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Correct Answer
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