Chapter 21 for Exam 5

There are nontariff barriers in the form of _______________ regulations, in which certain textiles are made in the United States, shipped to other countries, combined in making apparel with textiles made in those other countries—and then re-exported back to the United States at a lower tariff rate.

"rules of origin"

It is sometimes argued that nation should not depend too heavily on other countries for supplies of certain key products. This argument is commonly know as the _______________.

National Interest Argument

__________________ are ways that a nation can draw up regulations, inspections, and paperwork to make it more costly or difficult to import products.

Nontariff barriers

The race to the bottom scenario of global environmental degradation is explained roughly like this:

Profit-seeking multinational companies shift their production from countries with strong environmental standards to countries with weak standards, thus reducing their costs and increasing their profits.

________________________ is theoretically possible, even sensible: give an industry a short-term indirect subsidy through protection, and then reap the long-term economic benefits of having a vibrant healthy industry.

The infant industry argument

Why would foreign firms export a product at less than its cost of production—which presumably means making a loss?

This may be part of a long-term strategy in which foreign firms would sell at below the cost of production in the short-term for a time, and when they have driven out the domestic U.S. competition, they would then raise prices.

A rule that every imported product must be opened by hand and inspected with a magnifying glass, by one of just three government inspectors available at any given time might be referred to as __________________.

a non-tariff barrier

A tariff differs from a quota in that a tariff is:

a tax imposed on imports, whereas a quota is an absolute limit to the number of units of a good that can be imported.

As international trade increases, it contributes to a shift in jobs away from industries where that economy does not have a _________ advantage and toward industries where it has a __________ advantage.

comparative; comparative

Which of the following is not a short-run impact of imposing quotas on the American industries they seek to protect?

government tax revenues increase

An import quota or tariff on French wine that raises the prices for wine will probably:

hurt domestic wine drinkers but help domestic wineries, which will gain from the higher prices.

Tariffs are taxes imposed on _________________.

imported products

After the USA introduces a tariff in the market for gigastraps, the price of gigastraps in the USA will:

increase

Raising an existing tariff on grapes from Argentina will:

increase American consumption of domestically produced grapes.

Introducing a tariff on vitamin Z would:

increase American consumption of domestically produced vitamin Z.

Import tariffs generally ____ the output of domestic producers of the affected products and also ____ the output of domestic exporters.

increase; decrease

Low-wage U.S. workers suffer from protectionism in all the industries that they don't work in, because:

protectionism forces them to pay higher prices for basic necessities like clothing and food.

International trade is fundamentally a ________________________.

win-win situation.

__________ means selling goods below their cost of production.

Dumping

_____________ are numerical limitations on the quantity of products that can be imported.

Import quotas