Chapter 6 (T/F)
A comparison based on hourly wages is a reasonable guide to a need to protect domestic jobs.
False
A compound duty is a combination of specific and variable duties.
False
A historical function of capitalist—but not communist—governments has been the protection of the economic activities within their geographic area of control.
False
Businesses favor unstable governments because they present more profit opportunities.
False
Country risk assessment is a measure of the threat of nationalization.
False
Country risk assessment is an evaluation that assesses a country's political situation and policies to determine how much risk exists of a change in that country's government.
False
Fair competition is a strong rationale for trade barriers.
False
Former British prime minister Tony Blair led the privatization movement
False
Kidnap, ransom, and extortion are techniques often used by terrorists against which no insurance is available.
False
New types of dumping include concession dumping.
False
Nontariff barriers that are not quantitative can be divided into two groups, those that are established by the government participation in trade and those that are administrative.
False
One example of nationalization of private companies is the nationalization of French-owned firms in Europe after World War II.
False
One way that the WTO defines dumping is the selling of a product abroad for less than the average cost of production in the importing nation.
False
Only in communist countries do governments own the factors of production
False
Paying ransom makes sense because a life is saved and the payments can be traced.
False
Protection of infant industries through trade restrictions is used only in developing nations.
False
Retaliatory trade restrictions are not made for dumping because price competition is protected by the WTO.
False
Sanctions against nations are not a form of trade restriction because the motivation is political.
False
Sanctions are a trade restriction that is effective in forcing change.
False
Subsidies from the United States to its sugar industry have been critical in helping to prevent a loss of jobs from American companies that are high users of sugar.
False
Terrorists avoid kidnapping because the repercussions can be harmful to their movement
False
The government officials who make decisions about import restrictions are particularly sensitive to their country's broad population of consumers, who will be hurt by international competition.
False
The length of the investment in a foreign country has no impact on the risk assessment for that investment. What matters is the economic and political situations in the country.
False
The national defense argument for trade restrictions is based on the development level of the country.
False
The only reason firms are nationalized is to spread a socialist-communist ideology.
False
The practice of country risk assessment is an exercise in xenophobic and ethnocentric thinking.
False
The types of information a firm will need to judge country risks vary according to the nature of its business and the amount of money invested.
False
The utility of risk analyses of social, political, and economic factors increases rapidly over longer time spans.
False
Trade barriers create costs that are paid by the government erecting the barrier.
False
Unlike the topography, the political climate of a country has relatively little influence on its exports.
False
Voluntary export restraints are imposed by the importing nation to avoid violating WTO rules.
False
When government-owned companies compete with private companies, the private companies have the advantage.
False
When people are kidnapped for ransom, the right response is to pay the ransom, get the hostages released, and then retaliate.
False
A variable levy confers benefit on the domestic producer, as with the EU variable levy on grain.
True
Country risks are increasingly political in nature.
True
Duties may be used to encourage local input.
True
New types of dumping include tax dumping.
True
Nuisance tariffs require importers to go through the administrative paperwork connected to paying tariffs, even though the payment itself might be quite small.
True
Policy continuity and government stability are more important to a business than the type of political system.
True
Subsidies that confer a benefit may well evoke countervailing duties.
True
Tariff barriers may be used to protect domestic industry from foreign, lower-cost producers.
True
The Multi-Fiber Arrangement (MFA) was an orderly marketing arrangement to regulate textiles and clothing exports.
True
The national defense argument for trade restrictions suggests that some industries, even if they are not competitive, need protection from imports.
True
To hedge the terrorism risk, there are insurance, antiterrorist schools, and even companies to handle negotiations.
True
To protect an infant industry, trade restrictions might be effective.
True
Trade restrictions violate the spirit of the WTO.
True
U.S. ocean shipping companies are benefiting from U.S. government subsidies.
True
When the U.S. military contracts out security details in war zones, it is engaged in privatization.
True
Zimbabwe's government offers an example of government instability
True