Chapter 6
True
Outsourcing of blue collar jobs to firms in low income countries became increasingly common during 1990-2000 but outsourcing of white collar jobs to firms in low income countries did not become common until 2001-2009
False
the retail price of an imported product equals the transaction value of the product
True
the transaction value of a product is the price that is actually paid or payable for the product when it is sold for export
True
both tariffs and quotas raise the prices that consumers in the importing country pay for the products
True
A company's import policy affects the availability of foreign made goods and services in the domestic market
False
A country's consumers are usually better off when the country uses import tariffs rather than quotas to protect domestic producers because tariffs raise the prices consumers pay and quotas don't affect it
True
A country's consumers are usually better off when the country uses import tariffs rather than quotas to protect domestic producers because the prices that consumers pay for products increase more under quotas
False
A country's import tariffs and quotas protect domestic producers and retailers from competition in foreign markets
False
A country's import tariffs are beneficial for everyone in the country because the tariffs provide revenue for the government and help to keep the domestic workers employed and domestic companies in business
True
A country's trade policy combines economic and political perspectives in exerting influence on the country's imports and exports of goods and services
False
A countrys export policy influences the selling of domestically produced goods and services within the country
True
A free trade area consists of multiple countries that have agreed to reduce barriers to trade among these countries
True
A free trade zone in a country sometimes refers to a designated site within the country where duty free imported goods can be stored temporarily and displayed in trade shows and or repackaged before exporting them to other countries
True
A lag usually occurs between the time an exchange rate changes and the time that trade patterns change as a result of the new exchange rate
True
A weak currency is a currency that has depreciated in value against other currencies and a strong currency is a currency that has appreciated in value against other currencies
True
According to GATT 94 Article VII the transaction value of a product is the customs value of the product used as the basis for ad valorem tariffs
True
An import quota on a product is a restriction on the quantity of the product that can be imported into a country
True
Appreciation of the value of a country's currency causes imports into the country to decrease in price and exports from the country to increase in price
False
As a result of FOB valuation by the US custom service companies that import goods into the US do not pay for transporting the goods from the factories that produce the goods to the ports where the goods leave the exporting country
True
Companies that operate in a free trade zone are allowed to import production inputs duty free into the zone, use those inputs to manufacture final products within the zones and then export the final products from the zone
True
Custom evaluators in the US use FOB value as its transaction value and custom evaluators in the EU use CIF value
True
Depreciation of the value of a country's currency causes imports into the country to increase in price and exports from the country to decrease in price
True
During 2001-2009 giant corporations some with more economic power than individual countries came to dominate global commerce
False
Exchange rate changes can be problematic for an apparel company that sources goods abroad because the prices the company pays for the goods are always based on the exchange rate in effect at the time the goods are imporetd into the company's country
True
Exchange rates have been floating and flexible since 1973 but from 1944 to 1973 countries belonging to the IMF kept their exchange rates fixed to the US dollar whose value was fixed to the price of gold
False
FOB is the value of a product before it is loaded on a carrier to leave the exporting country
True
FOB stands for Free on board and CIF stands for cost, insurance, freight
True
Foreign trade zones are also called outward processing zones or export processing zones
True
Globalization advanced quickly during the period of 1866-1914 as a result of several changes such as the invention of the steamship, railroad, telegraph and phone
True
Globalization slowed over the period 1915-1945 because of WWI, WWII the Russian Rev and Great Depression
False
Imported goods sold in duty free enterprises within a country are not subject to any customs requirements of the country
False
In the world as a whole tariffs increase the volume of trade and reduce the prices of both traded and non traded products
True
Major changes during 1990-2000 that advanced globalization included the miniarization of electronics and the expansion of microelectronic communcation
True
Major policy changes that advanced globalization during 1946-1989 included the GATT that led to reduced barriers to international trade and the MFA that helped disperse apparel production for export to many low income countries despites its purpose to protect textile and apparel producers in developed countries from competing with imports from such countries
False
NAFTA is an example of a qualified industrial zone
False
One difference between the Tariff Schedule and the HTS is that the metric system was used in the former and the english system is used in the latter
True
People could move freely between countries without passports during the period 1866-1914 a situation far different from today when people usually need passports to move between countries
True
Protectionism is a philosophy or an implemented policy geared toward minimizing imports of goods and services in domestic markets
False
Tariffs and quotas are the only mechanisms that countries have for discouraging imports from entering their markets
True
Technological change that advanced globalization during 1946-1989 included the wide adoption of shipping containers that increased the efficiency of itnernational shipping and the invention of computers, microcomputers, satellites and fiber optics that speeded long distance communication
True
The "most favored nation" clause of the GATT now called the "normal trade relations" under the WTO stipulates that when a member country grants a trade advantage to another member country it must grant the trade advantage to all member countries
True
The effective tariff on a garment includes the nominal tariff on the garment as well as any nominal tariffs on the fibers, yarns, fabric and or findings in the garment
False
The effective tariff on an imported garment would be lower than the nominal tariff on the garment if the nominal tariffs were charged on the materials used to produce the garment
False
The tariff on an imported product is either ad valorem or specific but never both
True
When a country has a foreign trade zone the country's custom service is responsible for ensuring that neither duty free inputs nor goods produced in the zone enter domestic consumption
True
When the GATT went into effect in 1947 it set ground rules for trade among the signatory countries with the primary purpose of reducing trade barriers, particularly tariffs and quantitative restrictions