Question 1

A country 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 restrains.This imposition by 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)   MonopolizationF) B) and E)
G) B) and D)

Question 2

_____ are specific duties representing a special tariff which is imposed for punishing foreign firms for engaging in dumping and these tend to be fairly substantial and stay in place for up to five years.

Accepted Answer

A)   Excise duties
B)   Civil duties
C)   Stamp duties
D)   Countervailing duties
E)   Customs dutiesF) A) and D)
G) C) and D)

Question 3

Why is retaliation by government intervention a risky strategy?

Accepted Answer

A)   It encourages dumping by foreign companies.
B)   A country that is being pressured may respond to the imposition of punitive tariffs by raising trade barriers of its own.
C)   It may expose certain industries that are important for national security to foreign competition.
D)   It allows firms to sell goods in foreign market at below their fair market value.
E)   It makes it difficult for domestic firms are unable to make any investments by borrowing money from the domestic capital market.F) A) and B)
G) B) and C)

Question 4

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.F) A) and D)
G) B) and E)

Question 5

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 quotasF) C) and D)
G) D) and E)

Question 6

A voluntary export restraint (VER)is a quota on trade imposed by the exporting country,typically at the request of the importing country's government.

Accepted Answer

A) True 
 B)False

Question 7

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.F) C) and D)
G) A) and E)

Question 8

The WTO's Agreement on _____ 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) F) None of the above
G) C) and D)

Question 9

Tariff rates on agricultural products are generally much lower than tariff rates on manufactured products or services.

Accepted Answer

A) True 
 B)False

Question 10

What is a voluntary export restraint? Why do exporting countries agree to VERs? Explain with an example.

Accepted Answer

A voluntary export restraint is a "volun...

Question 11

_____ take many forms including cash grants,low-interest loans,tax breaks,and government equity participation in domestic firms.

Accepted Answer

A)   Ad valorem tariffs
B)   Subsidies
C)   Quota rents
D)   Specific tariffs
E)   Local content requirementsF) A) and B)
G) B) and D)

Question 12

The extra profit that producers make when supply is artificially limited by an import quota is referred to as a:

Accepted Answer

A)   net profit.
B)   quota rent.
C)   trade surplus.
D)   profit margin.
E)   quota share.F) C) and E)
G) A) and B)

Question 13

Animax Limited got an order to sell 50000 Central Processing Units (CPUs) to Palladia,but the Palladian government stipulated that 15 percent of the component parts of those CPUs must be produced in Palladia.This stipulation by the Palladian government would be example of a(n) :

Accepted Answer

A)   voluntary export restraint.
B)   quota rent.
C)   import quota.
D)   local content requirement.
E)   antidumping policy.F) B) and D)
G) A) and B)

Question 14

A political argument for government intervention in international trade is that it is necessary to protect certain industries because they are important for national security.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following industries is most likely to come under the purview of national security?

Accepted Answer

A)   Pharmaceutical industry
B)   Action figures
C)   Semiconductors
D)   Gaming consoles
E)   Electrical appliancesF) C) and E)
G) B) and E)

Question 16

Quotas benefit consumers the most.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following terms refers to a government payment to a domestic producer?

Accepted Answer

A)   Value-Based Benefit
B)   Ad valorem tariff
C)   Subsidy
D)   Specific tariff
E)   QuotaF) C) and E)
G) B) and D)

Question 18

Dumping involves foreign producers:

Accepted Answer

A)   attempting hostile takeovers of domestic firms and usurping the available resources for production.
B)   indiscriminately exploiting the natural resources of a foreign country to create a later demand that can be met only by imports.
C)   eliminating competition by subsidizing prices in a foreign market with home market profits and eventually raising prices to earn substantial profits.
D)   capturing the niche market rather than the masses.
E)   exporting only a small restricted quantity of their products into an importing country.F) A) and B)
G) None of the above

Question 19

Which of the following best indicates the motive for foreign firms to engage in dumping?

Accepted Answer

A)   Unloading excess production in foreign markets
B)   Cutting labor costs to reduce the costs of production
C)   Providing a wider range of products for consumers in foreign markets
D)   Meeting the voluntary export requirements imposed on it
E)   Obtaining subsidies from the importing countryF) None of the above
G) A) and B)

Question 20

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

Accepted Answer

A)   Government and domestic producers
B)   Consumers and trade associations
C)   Exporters and importers
D)   Foreign producers
E)   International bodies such as WTOF) All of the above
G) A) and B)

Exam 7: The Political Economy of International Trade

_____ are specific duties representing a special tariff which is imposed for punishing foreign firms for engaging in dumping and these tend to be fairly substantial and stay in place for up to five years.

Correct Answer
verified

_____ take many forms including cash grants,low-interest loans,tax breaks,and government equity participation in domestic firms.

Correct Answer
verified

Which of the following terms refers to a government payment to a domestic producer?

Correct Answer
verified

What is a voluntary export restraint? Why do exporting countries agree to VERs? Explain with an example.

Correct Answer
verified
A voluntary export restraint is a "volun...
View Answer

A voluntary export restraint (VER)is a quota on trade imposed by the exporting country,typically at the request of the importing country's government.

Correct Answer
verified

Tariff rates on agricultural products are generally much lower than tariff rates on manufactured products or services.

Correct Answer
verified

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

Correct Answer
verified

Dumping involves foreign producers:

Correct Answer
verified

Correct Answer
verified

Animax Limited got an order to sell 50000 Central Processing Units (CPUs) to Palladia,but the Palladian government stipulated that 15 percent of the component parts of those CPUs must be produced in Palladia.This stipulation by the Palladian government would be example of a(n) :

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

Quotas benefit consumers the most.

Correct Answer
verified

Why is retaliation by government intervention a risky strategy?

Correct Answer
verified

Which of the following best indicates the motive for foreign firms to engage in dumping?

Correct Answer
verified

A political argument for government intervention in international trade is that it is necessary to protect certain industries because they are important for national security.

Correct Answer
verified

Which of the following industries is most likely to come under the purview of national security?

Correct Answer
verified

The WTO's Agreement on _____ 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

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

Correct Answer
verified

The Smoot-Hawley Act had a damaging effect on _____.

Correct Answer
verified

The extra profit that producers make when supply is artificially limited by an import quota is referred to as a:

Correct Answer
verified

Exam 7: The Political Economy of International Trade

_____ are specific duties representing a special tariff which is imposed for punishing foreign firms for engaging in dumping and these tend to be fairly substantial and stay in place for up to five years.

Correct AnswerverifiedShow Answer

_____ take many forms including cash grants,low-interest loans,tax breaks,and government equity participation in domestic firms.

Correct AnswerverifiedShow Answer

Which of the following terms refers to a government payment to a domestic producer?

Correct AnswerverifiedShow Answer

What is a voluntary export restraint? Why do exporting countries agree to VERs? Explain with an example.

Correct AnswerverifiedA voluntary export restraint is a "volun...View AnswerShow Answer

A voluntary export restraint (VER)is a quota on trade imposed by the exporting country,typically at the request of the importing country's government.

Correct AnswerverifiedShow Answer

Tariff rates on agricultural products are generally much lower than tariff rates on manufactured products or services.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Dumping involves foreign producers:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Animax Limited got an order to sell 50000 Central Processing Units (CPUs) to Palladia,but the Palladian government stipulated that 15 percent of the component parts of those CPUs must be produced in Palladia.This stipulation by the Palladian government would be example of a(n) :

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

Quotas benefit consumers the most.

Correct AnswerverifiedShow Answer

Why is retaliation by government intervention a risky strategy?

Correct AnswerverifiedShow Answer

Which of the following best indicates the motive for foreign firms to engage in dumping?

Correct AnswerverifiedShow Answer

A political argument for government intervention in international trade is that it is necessary to protect certain industries because they are important for national security.

Correct AnswerverifiedShow Answer

Which of the following industries is most likely to come under the purview of national security?

Correct AnswerverifiedShow Answer

The WTO's Agreement on _____ 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

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

Correct AnswerverifiedShow Answer

The Smoot-Hawley Act had a damaging effect on _____.

Correct AnswerverifiedShow Answer

The extra profit that producers make when supply is artificially limited by an import quota is referred to as a:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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A voluntary export restraint is a "volun...
View Answer

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