Question 1 Multiple Choice 0 of 1 point(s)
Although the trade deficit in the U.S. peaked in 1987 at more than $170 billion, by the end of 1992, the annual deficit rate was still running about
Your Answer: 125 billion.
Correct Answer: 80 billion.
Feedback: Difficulty: HardPage: 196
Question 2 Multiple Choice 0 of 1 point(s)
By far, the oldest economic argument for government intervention into the free flow of trade is the __________ argument.
Your Answer: proprietary industry
Correct Answer: infant industry
Feedback: Difficulty: EasyPage: 190
Question 3 True/False 0 of 1 point(s)
Administrative trade policies are bureaucratic rules that are designed to make it easy for imports to enter a country.
Your Answer: true
Correct Answer: false
Feedback: Difficulty: MediumPage: 185
Question 4 Multiple Choice 1 of 1 point(s)
__________ are the oldest and simplest instrument of trade policy.
Your Answer: Tariffs
Correct Answer: Tariffs
Feedback: Difficulty: MediumPage: 180
Question 5 True/False 1 of 1 point(s)
Tariffs increase the overall efficiency of the world economy because a protective tariff encourages domestic firms to produce products at home, in theory, which could be produced more efficiently abroad.
Your Answer: false
Correct Answer: false
Feedback: Difficulty: HardPage: 181
Question 6 Multiple Choice 0 of 1 point(s)
Local content regulations have been widely used by _____to shift their manufacturing base from the simple assembly of products whose parts are manufactured elsewhere into the local manufacture of component parts.
Your Answer: developed nations
Correct Answer: developing nations
Feedback: Difficulty: MediumPage: 184
Question 7 Multiple Choice 0 of 1 point(s)
What is the ultimate objective of antidumping policies?
Your Answer: Protect host governments from the loss of legitimate tax revenue
Correct Answer: Protect domestic producers from “unfair” foreign competition
Feedback: Difficulty: MediumPage: 186
Question 8 True/False 0 of 1 point(s)
From the point of view of a domestic producer of parts going into a final product, local content requirements provide protection in the same way an import quota does: by limiting foreign competition.
Your Answer: false
Correct Answer: true
Feedback: Difficulty: MediumPage: 184
Question 9 Multiple Choice 0 of 1 point(s)
Both import quotas and VERs benefit ______ by limiting import competition, but they result in higher prices, which hurts __________.
Your Answer: foreign producers, governments
Correct Answer: domestic producers, consumers
Feedback: Difficulty: HardPage: 184
Question 10 Multiple Choice 0 of 1 point(s)
If Westvaco decided to produce paper in Spain, and the Spanish government stipulated that 50% of the component parts that went into Westvaco's paper must be produced locally, that requirement would be an example of a(n)
Your Answer: ad valorem content requirement.
Correct Answer: local content requirement.
Feedback: Difficulty: MediumPage: 184
Question 1 Multiple Choice 1 of 1 point(s)
__________ are the oldest and simplest instrument of trade policy.
Your Answer: Tariffs
Correct Answer: Tariffs
Feedback: Difficulty: MediumPage: 180
Question 2 Multiple Choice 1 of 1 point(s)
The Uruguay Round of the GATT agreement lasted for:
Your Answer: seven years
Correct Answer: seven years
Feedback: Difficulty: HardPage: 196
Question 3 True/False 1 of 1 point(s)
Countries sometimes argue that it is important to protect certain industries for reasons of national security.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: MediumPage: 187
Question 4 True/False 0 of 1 point(s)
The D'Amato Act is legislation that allows Americans to sue foreign firms that use property in Cuba confiscated from them after the 1959 revolution.
Your Answer: true
Correct Answer: false
Feedback: Difficulty: HardPage: 190
Question 5 True/False 1 of 1 point(s)
Consumers are benefited by quotas.
Your Answer: false
Correct Answer: false
Feedback: Difficulty: EasyPage: 184
Question 6 Multiple Choice 0 of 1 point(s)
The __________ is legislation that is similar to the Helms-Burton Act, but is aimed at Libya and Iran.
Your Answer: Perkin's Act
Correct Answer: D'Amato Act
Feedback: Difficulty: HardPage: 190
Question 7 Multiple Choice 1 of 1 point(s)
A quota on trade imposed by the exporting country, typically at the request of the importing country's government is referred to as a(n)
Your Answer: voluntary export restraint.
Correct Answer: voluntary export restraint.
Feedback: Difficulty: MediumPage: 183
Question 8 Multiple Choice 0 of 1 point(s)
According to the textbook, Paul Krugman, a professor at MIT, predicts that a country that attempts to use strategic trade policy to establish a domestic firm (or firms) in a dominant position in a global industry will probably
Your Answer: succeed fairly smoothly.
Correct Answer: provoke retaliation.
Feedback: Difficulty: MediumPage: 193
Question 9 Multiple Choice 1 of 1 point(s)
By far, the oldest economic argument for government intervention into the free flow of trade is the __________ argument.
Your Answer: infant industry
Correct Answer: infant industry
Feedback: Difficulty: EasyPage: 190
Question 10 Multiple Choice 1 of 1 point(s)
The WTO's policing and enforcement mechanisms are having ______ on world trade, according to the textbook.
Your Answer: a positive effect
Correct Answer: a positive effect
Feedback: Difficulty: MediumPage: 197
Question 1 Multiple Choice 1 of 1 point(s)
According to _______, subsidies can help a firm achieve a first-mover advantage in an emerging industry.
Your Answer: strategic trade policy
Correct Answer: strategic trade policy
Feedback: Difficulty: HardPage: 183
Question 2 Multiple Choice 1 of 1 point(s)
__________ status allows countries to export goods to the U.S. under favorable terms.
Your Answer: Most favored nation
Correct Answer: Most favored nation
Feedback: Difficulty: MediumPage: 190
Question 3 True/False 0 of 1 point(s)
A direct restriction on the quantity of some good that may be imported into a country is an import quota.
Your Answer: false
Correct Answer: true
Feedback: Difficulty: EasyPage: 183
Question 4 Multiple Choice 0 of 1 point(s)
Governments typically pay for subsidies by:
Your Answer: issuing new currency
Correct Answer: taxing individuals
Feedback: Difficulty: MediumPage: 183
Question 5 Multiple Choice 0 of 1 point(s)
An import quota is a direct restriction on the quantity of some good that may be
Your Answer: subsidized by a country.
Correct Answer: imported into a country.
Feedback: Difficulty: EasyPage: 183
Question 6 True/False 0 of 1 point(s)
GATT rules had applied only to manufactured goods and commodities until the Uruguay Round.
Your Answer: false
Correct Answer: true
Feedback: Difficulty: MediumPage: 196
Question 7 Multiple Choice 1 of 1 point(s)
______ is the main effect of the Uruguay Round Agreement on Agricultural products.
Your Answer: Farm subsidies will be reduced
Correct Answer: Farm subsidies will be reduced
Feedback: Difficulty: MediumPage: 196
Question 8 Multiple Choice 0 of 1 point(s)
Some would argue that (the) _______ is the master of administrative trade policies.
Your Answer: United States
Correct Answer: Japan
Feedback: Difficulty: MediumPage: 186
Question 9 Multiple Choice 0 of 1 point(s)
In general, what are two types of arguments for government intervention into the free flow of trade?
Your Answer: Patriotic and sociocultural
Correct Answer: Political and economic
Feedback: Difficulty: MediumPage: 186-187
Question 10 True/False 1 of 1 point(s)
The infant industry argument is the oldest economic argument for government intervention.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: MediumPage: 191
Question 1 Multiple Choice 1 of 1 point(s)
Local content requirements benefit the _____ of component parts, but they raise prices of imported components, which hurts ______.
Your Answer: producers, consumers
Correct Answer: producers, consumers
Feedback: Difficulty: HardPage: 185
Question 2 True/False 0 of 1 point(s)
The GATT has not yet recognized the infant industry argument as a legitimate reason for protectionism.
Your Answer: true
Correct Answer: false
Feedback: Difficulty: HardPage: 191
Question 3 Multiple Choice 1 of 1 point(s)
Both import quotas and VERs benefit ______ by limiting import competition, but they result in higher prices, which hurts __________.
Your Answer: domestic producers, consumers
Correct Answer: domestic producers, consumers
Feedback: Difficulty: HardPage: 184
Question 4 Multiple Choice 1 of 1 point(s)
If Westvaco decided to produce paper in Spain, and the Spanish government stipulated that 50% of the component parts that went into Westvaco's paper must be produced locally, that requirement would be an example of a(n)
Your Answer: local content requirement.
Correct Answer: local content requirement.
Feedback: Difficulty: MediumPage: 184
Question 5 Multiple Choice 1 of 1 point(s)
Bureaucratic rules that are designed to make it difficult for imports to enter a country are referred to as
Your Answer: administrative trade policies.
Correct Answer: administrative trade policies.
Feedback: Difficulty: EasyPage: 186
Question 6 Multiple Choice 1 of 1 point(s)
Tariffs cause the most damage to __________, according to the author of the textbook, because this group bears the economic brunt of tariffs.
Your Answer: consumers
Correct Answer: consumers
Feedback: Difficulty: MediumPage: 181
Question 7 Multiple Choice 0 of 1 point(s)
From the point of view of a domestic producer of parts going into a final product, local content regulations provide protection in the same way an import quota does:
Your Answer: by increasing tariffs
Correct Answer: by limiting foreign competition
Feedback: Difficulty: MediumPage: 185
Question 8 True/False 0 of 1 point(s)
The main gains from subsidies benefit importers, whose international competitiveness is increased as a result of them.
Your Answer: true
Correct Answer: false
Feedback: Difficulty: MediumPage: 183
Question 9 True/False 1 of 1 point(s)
A direct restriction on the quantity of some good that may be imported into a country is an import quota.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: EasyPage: 183
Question 10 True/False 1 of 1 point(s)
Countries sometimes argue that it is important to protect certain industries for reasons of national security.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: MediumPage: 187
Question 1 Multiple Choice 0 of 1 point(s)
Which of the following is not a component of the Uruguay Round agreement?
Your Answer: Agricultural subsidies will be substantially reduced.
Correct Answer: Tariffs on industrial goods will be increased by more the one-half
Feedback: Difficulty: HardPage: 196
Question 2 Multiple Choice 1 of 1 point(s)
_______ arguments for government intervention into international trade are typically concerned with boosting the overall wealth of a nation.
Your Answer: Economic
Correct Answer: Economic
Feedback: Difficulty: EasyPage: 187
Question 3 Multiple Choice 1 of 1 point(s)
In general, what are two types of arguments for government intervention into the free flow of trade?
Your Answer: Political and economic
Correct Answer: Political and economic
Feedback: Difficulty: MediumPage: 186-187
Question 4 Multiple Choice 0 of 1 point(s)
Advocates of strategic trade policy favor the use of __________ to help domestic firms achieve a dominant position in those industries where economies of scale are important and the world market is not large enough to profitably support more than a few firms (e.g. aerospace, semiconductors).
Your Answer: tariffs
Correct Answer: subsidies
Feedback: Difficulty: HardPage: 183
Question 5 Multiple Choice 1 of 1 point(s)
Some would argue that (the) _______ is the master of administrative trade policies.
Your Answer: Japan
Correct Answer: Japan
Feedback: Difficulty: MediumPage: 186
Question 6 Multiple Choice 0 of 1 point(s)
Local content regulations have been widely used by _____to shift their manufacturing base from the simple assembly of products whose parts are manufactured elsewhere into the local manufacture of component parts.
Your Answer: 1st world countries
Correct Answer: developing nations
Feedback: Difficulty: MediumPage: 184
Question 7 Multiple Choice 1 of 1 point(s)
The __________ is legislation that is similar to the Helms-Burton Act, but is aimed at Libya and Iran.
Your Answer: D'Amato Act
Correct Answer: D'Amato Act
Feedback: Difficulty: HardPage: 190
Question 8 Multiple Choice 0 of 1 point(s)
The Corn Laws
Your Answer: were repealed after record harvests in Britain.
Correct Answer: placed a high tariff on corn imported into Britain.
Feedback: Difficulty: HardPage: 194
Question 9 True/False 1 of 1 point(s)
The infant industry argument is the oldest economic argument for government intervention.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: MediumPage: 191
Question 10 Multiple Choice 1 of 1 point(s)
Trade barriers __________ the costs of exporting products to a country.
Your Answer: raise
Correct Answer: raise
Feedback: Difficulty: MediumPage: 206
Question 1 Multiple Choice 1 of 1 point(s)
The __________ is legislation that is similar to the Helms-Burton Act, but is aimed at Libya and Iran.
Your Answer: D'Amato Act
Correct Answer: D'Amato Act
Feedback: Difficulty: HardPage: 190
Question 2 True/False 1 of 1 point(s)
A direct restriction on the quantity of some good that may be imported into a country is an import quota.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: EasyPage: 183
Question 3 True/False 0 of 1 point(s)
The Helms-Burton Act was designed to protect the jobs of Europe's politically powerful farmers by restricting imports and guaranteeing prices.
Your Answer: true
Correct Answer: false
Feedback: Difficulty: HardPage: 190
Question 4 Multiple Choice 1 of 1 point(s)
Which of the following refers to a situation where a government does not attempt to restrict what its citizens can buy from another country or what they can sell to another country?
Your Answer: Free trade
Correct Answer: Free trade
Feedback: Difficulty: EasyPage: 180
Question 5 Multiple Choice 1 of 1 point(s)
Lowering production costs helps domestic producers
Your Answer: gain export markets.
Correct Answer: gain export markets.
Feedback: Difficulty: MediumPage: 182
Question 6 Multiple Choice 1 of 1 point(s)
The ______ was created to arbitrate trade disputes and monitor the trade policies of member countries as a result of the Uruguay Round agreement.
Your Answer: World Trade Organization
Correct Answer: World Trade Organization
Feedback: Difficulty: MediumPage: 197
Question 7 Multiple Choice 1 of 1 point(s)
__________ are the oldest and simplest instrument of trade policy.
Your Answer: Tariffs
Correct Answer: Tariffs
Feedback: Difficulty: MediumPage: 180
Question 8 Multiple Choice 1 of 1 point(s)
Perhaps the most common political argument for government intervention into the free flow of trade is that
Your Answer: it is necessary for protecting jobs and industries from foreign competition.
Correct Answer: it is necessary for protecting jobs and industries from foreign competition.
Feedback: Difficulty: MediumPage: 187
Question 9 True/False 1 of 1 point(s)
An industry that has long operated with import quotas is the textile industry.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: MediumPage: 184
Question 10 Multiple Choice 0 of 1 point(s)
__________ are levied as a fixed charge for each for each unit of a good imported.
Your Answer: General tariffs
Correct Answer: Specific tariffs
Feedback: Difficulty: EasyPage: 181
Question 1 Multiple Choice 1 of 1 point(s)
While __________ tariffs are levied as a fixed charge for each unit of a good imported, __________ tariffs are levied as a proportion of the value of the imported good.
Your Answer: specific, ad valorem
Correct Answer: specific, ad valorem
Feedback: Difficulty: MediumPage: 181
Question 2 True/False 1 of 1 point(s)
Governments sometimes use trade policy to support their foreign policy objectives.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: EasyPage: 190
Question 3 True/False 1 of 1 point(s)
The Helms-Burton Act was designed to protect the jobs of Europe's politically powerful farmers by restricting imports and guaranteeing prices.
Your Answer: false
Correct Answer: false
Feedback: Difficulty: HardPage: 190
Question 4 True/False 1 of 1 point(s)
An industry that has long operated with import quotas is the textile industry.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: MediumPage: 184
Question 5 Multiple Choice 1 of 1 point(s)
________ arguments challenge the rationale for unrestricted free trade found in the work of classic trade theorists such as Adam Smith and David Ricardo.
Your Answer: Economic justification
Correct Answer: Economic justification
Feedback: Difficulty: MediumPage: 193
Question 6 True/False 0 of 1 point(s)
Against the background of rising pressures for protectionism, in 1986 the members of the GATT embarked on their eighth round of negotiations to reduce tariffs, the Brussels Round.
Your Answer: true
Correct Answer: false
Feedback: Difficulty: MediumPage: 196
Question 7 True/False 1 of 1 point(s)
From the point of view of a domestic producer of parts going into a final product, local content requirements provide protection in the same way an import quota does: by limiting foreign competition.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: MediumPage: 184
Question 8 Multiple Choice 0 of 1 point(s)
Aimed at avoiding rising unemployment by protecting domestic industry and diverting consumer demand away from foreign products, the ______ tariff erected an enormous wall of tariff barriers.
Your Answer: Heckscher-Ohlin
Correct Answer: Smott-Hawley Act
Feedback: Difficulty: HardPage: 195
Question 9 Multiple Choice 0 of 1 point(s)
Antidumping duties are often called:
Your Answer: special circumstance duties
Correct Answer: countervailing duties
Feedback: Difficulty: HardPage: 186
Question 10 Multiple Choice 0 of 1 point(s)
One of the most famous examples of a(n) __________ is the limitation on auto exports to the United States enforced by Japanese automobile producers in 1981.
Your Answer: involuntary import restraint
Correct Answer: voluntary export restraint
Feedback: Difficulty: HardPage: 183
Question 1 True/False 1 of 1 point(s)
Consumers are benefited by quotas.
Your Answer: false
Correct Answer: false
Feedback: Difficulty: EasyPage: 184
Question 2 True/False 0 of 1 point(s)
Administrative trade policies are bureaucratic rules that are designed to make it easy for imports to enter a country.
Your Answer: true
Correct Answer: false
Feedback: Difficulty: MediumPage: 185
Question 3 True/False 0 of 1 point(s)
The extra profit that producers make when supply is artificially limited by an import quota is referred to as a quota subsidy.
Your Answer: true
Correct Answer: false
Feedback: Difficulty: MediumPage: 184
Question 4 Multiple Choice 1 of 1 point(s)
A quota on trade imposed by the exporting country, typically at the request of the importing country's government is referred to as a(n)
Your Answer: voluntary export restraint.
Correct Answer: voluntary export restraint.
Feedback: Difficulty: MediumPage: 183
Question 5 True/False 1 of 1 point(s)
Ad valorem tariffs are levied as a proportion of the value of the imported good.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: MediumPage: 181
Question 6 Multiple Choice 0 of 1 point(s)
According to our textbook, there are __________ economic arguments for supporting unrestricted free trade.
Your Answer: no
Correct Answer: strong
Feedback: Difficulty: EasyPage: 194
Question 7 Multiple Choice 1 of 1 point(s)
What demands that some specific fraction of a good be produced domestically?
Your Answer: Local content requirement
Correct Answer: Local content requirement
Feedback: Difficulty: EasyPage: 184
Question 8 Multiple Choice 1 of 1 point(s)
Which of the following is not a component of the Uruguay Round agreement?
Your Answer: Tariffs on industrial goods will be increased by more the one-half
Correct Answer: Tariffs on industrial goods will be increased by more the one-half
Feedback: Difficulty: HardPage: 196
Question 9 True/False 1 of 1 point(s)
The infant industry argument is the oldest economic argument for government intervention.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: MediumPage: 191
Question 10 Multiple Choice 1 of 1 point(s)
Although the trade deficit in the U.S. peaked in 1987 at more than $170 billion, by the end of 1992, the annual deficit rate was still running about
Your Answer: 80 billion.
Correct Answer: 80 billion.
Feedback: Difficulty: HardPage: 196
Question 1 True/False 1 of 1 point(s)
Governments typically pay for subsidies by taxing individuals.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: MediumPage: 183
Question 2 Multiple Choice 1 of 1 point(s)
Trade barriers __________ the costs of exporting products to a country.
Your Answer: raise
Correct Answer: raise
Feedback: Difficulty: MediumPage: 206
Question 3 True/False 1 of 1 point(s)
Ad valorem tariffs are levied as a proportion of the value of the imported good.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: MediumPage: 181
Question 4 Multiple Choice 1 of 1 point(s)
Local content requirements benefit the _____ of component parts, but they raise prices of imported components, which hurts ______.
Your Answer: producers, consumers
Correct Answer: producers, consumers
Feedback: Difficulty: HardPage: 185
Question 5 Multiple Choice 1 of 1 point(s)
Some would argue that (the) _______ is the master of administrative trade policies.
Your Answer: Japan
Correct Answer: Japan
Feedback: Difficulty: MediumPage: 186
Question 6 Multiple Choice 1 of 1 point(s)
From the point of view of a domestic producer of parts going into a final product, local content regulations provide protection in the same way an import quota does:
Your Answer: by limiting foreign competition
Correct Answer: by limiting foreign competition
Feedback: Difficulty: MediumPage: 185
Question 7 True/False 1 of 1 point(s)
In regard to tariffs, consumers lose because they must pay more for certain imports.
Your Answer: true
Correct Answer: true
Feedback: Difficulty: MediumPage: 181
Question 8 Multiple Choice 1 of 1 point(s)
An import quota is a direct restriction on the quantity of some good that may be
Your Answer: imported into a country.
Correct Answer: imported into a country.
Feedback: Difficulty: EasyPage: 183
Question 9 Multiple Choice 1 of 1 point(s)
______ is the main effect of the Uruguay Round Agreement on Agricultural products.
Your Answer: Farm subsidies will be reduced
Correct Answer: Farm subsidies will be reduced
Feedback: Difficulty: MediumPage: 196
Question 10 Multiple Choice 1 of 1 point(s)
The ______ was created to arbitrate trade disputes and monitor the trade policies of member countries as a result of the Uruguay Round agreement.
Your Answer: World Trade Organization
Correct Answer: World Trade Organization
Feedback: Difficulty: MediumPage: 197
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