Ch. 9 International Trade Policy
Which of the following is not a form of administered protection? a. Antidumping duties b. Countervailing duties c. Specific duties d. Escape clause actions
c.
Which of the following is not a type of dumping? a. Sporadic dumping b. Predatory dumping c. Complex dumping d. Persistent dumping
c.
Which of the following is the term that refers to a situation where a country exports a good at a lower price than it sells for domestically? a. Voluntary export restraint b. International commodity agreements c. Dumping d. Autarky
c.
Which of the following pieces of legislation is the foundation of modern U.S. international trade policy? a. The Tariff Act of 1828 b. The Smoot-Hawley Tariff of 1930 c. The Reciprocal Trade Agreements Act of 1934 d. The Trade and Tariff Act of 1958
c.
Which of the following pieces of legislation made MFN an integral part of U.S. international trade policy? a. The Tariff of Abominations Act of 1834 b. The Smoot-Hawley Tariff of 1930 c. The Reciprocal Trade Agreements Act of 1934 d. The Dillon Act of 1958
c.
Which of the following statements is false? a. Large industries tend to get more protection than small ones. b. Concentrated industries tend to get more protection than industries that have a large number of small firms. c. Intermediate products tend to get less protection than final products. d. Industries that are not very concentrated geographically tend to receive lower levels of protection than industries that are regionally concentrated.
c.
Which of the following statements is true? a. U.S. antidumping law only prohibits predatory dumping. b. U.S. antidumping law is completely consistent with WTO rules. c. In an antidumping case, the ITA determines if the foreign product is being dumped in the U.S. market. d. In an antidumping case, the ITC does not participate in the investigation.
c.
When the Allied powers met at a conference in 1944, what international organizations were developed? a. The International Monetary Fund b. The International Bank for Reconstruction and Development (World Bank) c. The World Trade Organization d. Both a and b
d.
Which of the following countries is not currently a member of the WTO? a. France b. Canada c. Germany d. Iraq
d.
Which of the following industries are more likely to be protected? a. industries with few firms b. industries that produce an intermediate product c. industries with a comparative disadvantage d. all of the above
d.
Which of the following is more likely to be protected by trade barriers in the U.S.? a. jump ropes b. apple juice c. wheat d. steel
d.
Which of the following is not a benefit of international trade? a. larger selection of products b. increased production efficiencies c. more efficient allocation of resources d. a re-distribution of income from scarce to abundant factors of production
d.
Which of the following is not a form of administered protection? a. Antidumping duties b. Countervailing duties c. The escape clause d. Offshore assembly
d.
The current round of multilateral trade negotiations is known as: a. the Bush Round. b. the Uruguay Round. c. the Doha Round. d. the Tokyo Round.
c.
Which of the following increases the likelihood of protectionism for a particular industry? a. The industry produces an intermediate product. b. The industry consists of many small firms. c. The industry is not unionized. d. The industry is geographically dispersed.
a
Antidumping duties: a. are used to offset the effects of imports being sold at a price lower than that charged in the country of origin. b. are illegal under U.S. trade law. c. are administered by the Antitrust Division of the Justice Department. d. all of the above
a.
International trade maximizes world welfare as the gains from trade cause: a. A more efficient allocation of world resources. b. A decrease in price of non-tradeable goods. c. More democracy in foreign countries. d. A decrease in overall world production.
a.
Payment by government to a firm for each unit of output that it exports is known as a(n) _____. a. export subsidy b. direct tax rebate c. GATT/WTO d. local content requirement
a.
The application of countervailing duties against subsidized exports: a. does not require evidence of international price discrimination. b. is handled only by the International Trade Commission. c. is handled only by the Department of Commerce. d. only applies to developing countries.
a.
The escape clause: a. can be used to restrict the import of fairly traded goods. b. only applies to import competition from allegedly low-wage countries. c. involves the total prohibition of goods imported from some countries. d. is imposed hundreds of times a year on thousands of different types of imports.
a.
The fact that there are very different tariffs on different products is known as: a. the structure of protection. b. public choice. c. positive choice. d. rent seeking
a.
The international organization that serves as a forum for trade discussions and the development of trade rules is called the: a. WTO. b. World Bank. c. United Nations. d. International Trade Commission.
a.
The theory of public choice is based on the premise that: a. politicians attempt to maximize their utility. b. politicians attempt to maximize the country's utility. c. politicians attempt to keep neutral on unpopular subjects. d. politicians attempt to minimize their utility.
a.
The use of resources to convince a government to restrict trade in a particular product is called: a. rentseeking b. rent takers. c. monopolizing the market. d. monopoly power.
a.
Which of the following does not cause lasting damage to the domestic industry? a. Sporadic dumping b. Persistent dumping c. Predatory dumping d. All of the above
a.
Which of the following was not an MTN? a. The Seattle Round b. The Kennedy Round c. The Tokyo Round d. The Uruguay Round
a.
Countervailing duty cases involve: a. foreign monopoly pricing. b. foreign subsidies. c. foreign tariffs on U.S. exports. d. foreign VERs.
b.
From the late 1940s until the creation of the WTO, the treaty (organization) that was primarily responsible for conducting multilateral trade negotiations was the: a. World Bank. b. GATT. c. ITO. d. United Nations.
b.
Most favored nation (MFN) status means that a country treats another country: a. better than its other trading partners. b. the same as its other trading partners. c. worse than its other trading partners. d. any way it chooses since it is the "most favored nation."
b.
Since World War II, tariffs in general have: a. increased. b. decreased. c. remained constant. d. disappeared.
b.
The Constitution of the U.S. stipulates that the authority to regulate commerce and tariffs is given to: a. the President. b. Congress. c. the individual States. d. the U.S. Supreme Court.
b.
The Smoot-Hawley Tariff of 1930: a. restricted the President to negotiate tariff reductions. b. increased tariffs to their highest levels of the twentieth century. c. provided a stimulus to the U.S. economy. d. began the process of the worldwide lowering of tariffs.
b.
The Tariff of _____ was passed in _____ over the strong objections of the Southern states. a. Waste, 1840 b. Abominations, 1828 c. Revenue, 1870 d. New York, 1990
b.
The WTO was established in which round of trade negotiations? a. The Kennedy Round b. The Uruguay Round c. The NAFTA Round d. The Tokyo Round
b.
The most favored nation principle of the WTO means that a tariff concession granted by one member country to another member country will: a. be extended to all other countries without exception. b. be extended to all other countries that are WTO members. c. be extended to all WTO member countries that make a similar concession. d. be extended to those WTO member countries that the country making the concession designates.
b.
When using the most favored nation principle in international trade, this means that: a. we prefer a foreign country's production to domestic production. b. the lowest MFN negotiated tariff rate would apply to all WTO members countries. c. the lowest negotiated tariff rate would apply to some countries. d. the countries have come close to a free trade agreement.
b.
Which of the following statements is false? a. GATT was a replacement for the failure of the U.S. to participate in the proposed ITO. b. The ITO was a substitute for GATT. c. GATT was a treaty and technically was not an organization. d. Under GATT the explicit use of quotas to protect domestic industries was illegal in most cases.
b.
Which of the following companies filed a famous escape clause case in the early 1980s? a. General Motors b. U.S. Steel c. Harley-Davidson d. Microsoft
c.
Which of the following is an exception to the most favored nation principle? a. Trade in petroleum b. Trade with Japan c. A free-trade area or a customs union d. Trade in services
c.
A countervailing duty is a tariff that is levied to: a. counteract the dumping of goods in the domestic market by foreign firms. b. counteract a sudden surge of imports that threaten to harm a domestic industry. c. counteract subsidies given to foreign firms by their own governments. d. counteract the tariff on domestic goods that are enacted by foreign governments.
c.
A principle problem associated with GATT was that: a. it was not really a formal international organization. b. the U.S. was not a member. c. it had no enforcement mechanism. d. it was part of the World Bank.
c.
Countervailing duty cases involve allegations of: a. foreign monopoly pricing. b. foreign barriers to U.S. exports. c. foreign export subsidies. d. foreign import subsidies.
c.
In economics the term policy usually means: a. the action that is taken by each specific company during its term. b. the duration of a specific action for which goods are traded internationally. c. an action or actions taken by the government. d. none of the above
c.
In the U.S. raising tariffs on a fairly traded imported product that causes harm to a domestic industry is what type of action? a. Anti-dumping b. Fair trade c. Escape clause d. Countervailing
c.
The General Agreement of Trade in Services is: a. an agreement among countries on the services that the WTO will offer. b. a general agreement among countries that services will be regulated independently within each country. c. an agreement among countries that trade in services should be regulated by agreed upon rules. d. a general agreement among countries that eliminates the Multi-Fibre Agreement.
c.
The Tariff of Abominations: a. led to the Revolutionary War. b. led to World War I. c. led to a large increase in U.S. tariffs in 1828. d. led to a large increase in U.S. tariffs in 1930.
c.
The activity of a group that seeks to gain from changes in government policy is known as: a. public policy. b. directly productive activities. c. rentseeking. d. broad focus tariff policy.
c.
The benefits of a very detailed tariff schedule include: a. the uniformity of tariffs for all products. b. an increased public awareness of price changes caused by changes in tariffs. c. the ability of government to provide protection on a specific product. d. the ability of government to provide a transparent level of protection for domestic producers.
c.
The branch of economics that applies economic analysis to voting behavior is known as: a. public finance. b. negative political science. c. public choice. d. economic analysis of DUP.
c.
The branch of economics that deals with governmental decisionmaking is: a. civics. b. public finance. c. public choice. d. economic/politics.
c.
Why do domestic firms and foreign countries find it difficult to interact with U.S. trade policy? a. Congress has to approve everything so it is a slow process. b. The President has to decide what U.S. trade policy will be. c. No one agency or person is responsible for U.S. trade policy. d. The USTR conducts U.S. trade policy through constant and slow negotiations.
c.
Both the WTO and GATT have worked to: a. reduce the indebtedness of developing countries. b. reduce large fluctuations in exchange rates. c. reduce trade barriers among countries on a bilateral basis. d. reduce trade barriers among countries on a multilateral basis.
d.
Dumping by a firm can be defined as: a. a firm selling a product at a price below its cost of production in a foreign market. b. a firm selling a product in a foreign market at a price lower than the price charged in its home market. c. the discharge of waste products into the environment. d. both a and b
d.
Dumping occurs when a firm: a. sells too much of a good in a foreign country. b. sells in a foreign country at prices that are below true value. c. sells in its home market at prices that are below the average price charged by its competitors. d. sells in a foreign market at prices that are below the price charged in the home market.
d.
GATT was: a. part of the International Monetary Fund. b. part of the World Bank. c. part of the United Nations. d. the interim committee designed to implement the International Trade Organization.
d.
Regulation of business by government is designed to aid in all of the following areas except: a. strengthening the operation of the economy. b. modifying the operation of the economy. c. enhancing the operation of the economy. d. concentrating the operation of the economy
d.
The act which was passed to mitigate the Smoot-Hawley Tariff and which is still the cornerstone of American trade policy is: a. the GATT Act. b. the Omnibus Trade and Competitiveness Act. c. the Smoot-Hawley Tariff. d. the Reciprocal Trade Agreements Act.
d.
The concept whereby all trading parties that were contracting parties to GATT or new members of the WTO are treated the same with respect to tariffs is known as: a. ITO. b. CIF. c. FOB. d. MFN
d.
The current average U.S. tariff rate is: a. 15%. b. 24%. c. 42%. d. 4%.
d.
The group that would most likely lobby to influence the international trade policy of a country is: a. the industry group that has a comparative advantage. b. foreign investors. c. individual private citizens, as they benefit from trade through lower product prices. d. the industry group that has a comparative disadvantage.
d.
The now infamous legislation of 1930 that imposed a very high tariff structure on goods imported into the U.S. was the: a. Reciprocal Trade Agreements Act. b. Trade and Tariff Act. c. Omnibus Trade and Competitiveness Act. d. Smoot-Hawley Tariff
d.
The study of politics within a country like the U.S. by economists is called: a. public economy. b. political economy. c. political choice. d. public choice.
d.
Which of the following is not a key provision of the Reciprocal Trade Agreement Act? a. The president is allowed to negotiate tariff reductions without Congressional involvement. b. The tariff reductions are made on a most favored nation basis. c. The U.S. would reduce tariffs for tariff reductions by other countries. d. Congress can amend a negotiated trade agreement.
d.
Which of the following is the only country in the world with a uniform tariff? a. Switzerland b. Mexico c. Nigeria d. Chile
d.
Which of the following statements is false? a. The Tariff of Abominations of 1828 led to a large increase in the U.S. tariff. b. Tariffs were increased in the 1860s to help the government pay for the Civil War. c. Before the Civil War tariff policy was a source of friction between the Northern and Southern parts of the U.S. d. The Smoot-Hawley Tariff of 1930 led to a large reduction in the U.S. tariff.
d.
Which of the following transferred power for trade negotiations from Congress to the President? a. Smoot-Hawley Act b. The Trade Expansion Act of 1962 c. The Trade Expansion Act of 1974 d. The Reciprocal Trade Agreements Act of 1934
d.
Which of the following was not a multilateral trade negotiation conducted under GATT? a. The Tokyo Round b. The Kennedy Round c. The Uruguay Round d. The NAFTA Round
d.
Which of the following would mostly likely not receive protection? a. Industries with a comparative disadvantage b. Industries that are regionally concentrated c. Industries that employ a large number of workers d. Industries that have a large number of firms
d.
Which organization has procedures for settling international trade disputes? a. The World Bank b. The International Monetary Fund c. The World Court of Appeals d. The World Trade Organization
d.
Resolution of dumping cases in the U.S. involves investigations by: a. the Justice Department and the International Trade Commission. b. the Justice and Commerce Departments. c. the Justice Department only. d. the International Trade Administration and the International Trade Commission.
d..