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People who argue for lifting the U.S. trade embargo with Cuba claim all of the following EXCEPT which one? 0/1 pts • • Increased exposure to the United States would be a more effective force of change. • U.S. companies lose Cuban sales to competitors from other countries. • The embargo has not achieved its purpose of changing Cuba's economic and political system • Cuba has largely become a market economy already.

Cuba has largely become a market economy already.

Why are offsets considered protectionist measures? 0/1 pts • • Exports must be sold at a certain percentage price below the price of domestic producers. • Exporters must often find markets for goods outside their lines of expertise. • Companies must submit samples to government authorities before receiving export permission. • Trading companies must incur additional inventory carrying charges and pay significantly higher tariffs.

Exporters must often find markets for goods outside their lines of expertise.

An effective tariff is the sum of the ad valorem tariff plus the specific duty. 0/1 pts • • True • False

False

Companies that have integrated their supply chains internationally tend to lobby their home governments for increased protectionist measures. 0/1 pts • • True • False

False

Countries typically establish export restrictions to encourage the development of substitute products. 0/1 pts • • True • False

False

Every time countries enter a new trading agreement, service trade tends to grow more rapidly than merchandise trade. 0/1 pts • • True • False

False

Export controls are highly effective for digital products, such as computers, TVs, and cameras. 0/1 pts • • True • False

False

Export prices of primary products fluctuate less than export prices of manufactured products. 0/1 pts • • True • False

False

Export-led development refers to the off-shoring of production. 0/1 pts • • True • False

False

Home country consumers are typically active in preventing their domestic companies from dumping products into foreign markets. 0/1 pts • • True • False

False

Import trade controls, but not export trade controls, can be used as a weapon of foreign policy. 0/1 pts • • True • False

False

In most cases, trade protectionism makes it easier for a company to buy what it needs and to sell products in global markets. 1/1 pts • • True • False

False

On average, workers displaced by imports earn higher wages in the new jobs they accept. 0/1 pts • • True • False

False

The argument for using protectionism to bring about industrialization in developing countries presumes that gains will occur because the industry will become internationally competitive. 0/1 pts • • True • False

False

The comparable access argument for import restrictions is a more valid economic argument for products using small-scale technology than for products requiring substantial economies of scale to be competitive. 0/1 pts • • True • False

False

The essential-industry argument holds that industries with potential export capabilities should be protected. 0/1 pts • • True • False

False

The group most likely to become involved in disputes concerning trade protectionism is consumers. 0/1 pts • • True • False

False

The most common type of tariff is the export tariff. 0/1 pts • • True • False

False

The purpose of "Made in" labels on imported products is to enable countries to keep records of the origin of imports. 0/1 pts • • True • False

False

Which of the following statements most likely undermines the infant-industry argument? 0/1 pts • • High tariffs to prevent foreign competition increase government revenues in the protected country. • Total unit costs decrease through economies of scale. • Experience of operating over time triggers higher productivity and global competitiveness. • Domestic entrepreneurs need assistance to compete in industries with high entry barriers.

High tariffs to prevent foreign competition increase government revenues in the protected country.

Which of the following is a problem with the infant-industry argument for protection? 0/1 pts • • Most developed countries increasingly have a larger portion of retirees than youth. • Other countries retaliate by limiting exports of technology needed by the infant industry producers. • Consumer groups become very active in protesting the higher prices that result during infancy. • If the industry does not lower costs sufficiently to be competitive, it becomes a formidable pressure group for continued protection.

If the industry does not lower costs sufficiently to be competitive, it becomes a formidable pressure group for continued protection.

All of the following are potential problems of using export controls EXCEPT which one? 0/1 pts • • There is more incentive for smuggling. • Domestic producers may have less incentive to increase output. • There is an incentive for other countries to develop production of their own. • Prices go up in the country imposing the controls.

Prices go up in the country imposing the controls.

People who argue for keeping the U.S. trade embargo with Cuba claim all of the following EXCEPT which one? 0/1 pts • • Removal of the embargo will cause much more Cuban immigration to the United States. • If the Cuban economy is weakened just a bit more, the Cuban political-economic system cannot be sustained. • There will be a backlash among countries supplying such commodities as sugar to the United States if the U.S. buys them from Cuba instead. • There is not much economic potential from trade given Cuba's small population and low per capita income.

Removal of the embargo will cause much more Cuban immigration to the United States. •

What is the primary difficulty associated with dismantling developed countries' agricultural subsidies? 0/1 pts • • The subsidies are used to counter the commodity agreements set up mainly by developing countries. • The subsidies are at the consumer, rather than producer, level, and everyone benefits from the lower prices. • Rural areas in the United States, the European Union, and Japan are disproportionately represented in their governments. • Developing countries put pressure on developed countries to maintain the subsidies so that they receive food products at a lower price.

Rural areas in the United States, the European Union, and Japan are disproportionately represented in their governments.

Which of the following hypothetical examples would be a restriction on the import of services? 0/1 pts • • Canada does not allow Air Canada to buy Brazilian aircraft. • The U.S. restricts foreign companies from carrying cargo between two U.S. cities. • Japan restricts North Koreans from visiting Tokyo Disneyland. • China does not allow the importation of rice from Thailand.

The U.S. restricts foreign companies from carrying cargo between two U.S. cities.

The relationship between import substitution policies and export-led development policies is best characterized by which of the following? 0/1 pts • • The two are hard to distinguish because production under import substitution may eventually be exported. • Import-substitution policies are more likely to lead to production of mature products, whereas export-led development policies result in production of growth products. • Production under import substitution policies, as opposed to export-led development policies, is more likely to be located in urban areas. • Production under import substitution policies, as opposed to export-led development policies, is likely to be more labor-intensive.

The two are hard to distinguish because production under import substitution may eventually be exported.

In nearly half the cases in which U.S. firms have requested protection from imports, one or more U.S. companies in the industry opposed the protection. What was the reason for opposing protection? 0/1 pts • • They feared that they would lose foreign export markets because of retaliation. • They did not want consumers to have to pay higher prices that would result from protection. • They believed that they could compete against global and domestic rivals. • These were foreign-owned companies that saw the opportunity to serve the U.S. market.

They believed that they could compete against global and domestic rivals.

All of the following are generally true about trade-displaced workers EXCEPT which one? 0/1 pts • • They spend their unemployment benefits on living rather than retraining. • They have difficulty finding new work because of educational deficiencies. • They move abroad to take new jobs. • They earn less in their new jobs than they earned in their old ones.

They move abroad to take new jobs.

A quota is a quantitative limit on the amount of a product that can be traded. 0/1 pts • • True • False

True

Agricultural subsidies by developed countries impede the competitiveness of agricultural exports by developing countries. 0/1 pts • • True • False

True

At present there is little reciprocal recognition of professional licensing among countries. 0/1 pts • • True • False

True

Governments sometimes prohibit operations of private companies, foreign or domestic, in some sectors because they feel these services should not be sold at a profit. 0/1 pts • • True • False

True

Helping a struggling domestic company through import restrictions frequently causes other countries to retaliate. 0/1 pts • • True • False

True

Import substitution is a program promoting local production of products that would otherwise be imported. 0/1 pts • • True • False

True

Infant-industry protection requires some segment of the economy to incur the higher costs when local production is inefficient. 0/1 pts • • True • False

True

The argument for using import controls to promote exports is partially premised on the assumption that other countries will remove their import restrictions as a result. 0/1 pts • • True • False

True

The countries most likely to be successful at using trade retaliation are large trading countries. 0/1 pts • • True • False

True

The infant-industry argument for trade protection holds that an industry needs government protection from imports until it becomes competitive enough in world markets. 1/1 pts • • True • False

True

The international regulatory situation for trade is becoming more, rather than less, complex. 0/1 pts • • True • False

True

The lowering of a foreign producer's price as a result of an imposed import tax is known as an optimum tariff. 0/1 pts • • True • False

True

The term protectionism, when applied to international trade, refers to governmental restrictions and incentives to affect trade flows. 0/1 pts • • True • False

True

When a company is seeking protection from imports, it can usually improve its chances of getting that protection if it allies with most of the companies in the industry. 0/1 pts • • True • False

True

When customs officials set a value on which to place an import tariff, they ordinarily use the declared invoice price unless they doubt its authenticity. 0/1 pts • • True • False

True

What is the most likely reason that consumers rarely protest import restrictions that raise the prices they pay for a specific product? 0/1 pts • • Typically, although the added costs to consumers for a given product are high in aggregate, they are fairly trivial for most individual consumers. • They reason that if they do something to hurt domestic employment for one product, the displaced workers will then do something that will hurt their own employment. • They reason that if the import restrictions are removed, the foreign producers will raise their prices to those of the domestic producers anyway. • Many countries prohibit consumers to band together to influence political actions.

Typically, although the added costs to consumers for a given product are high in aggregate, they are fairly trivial for most individual consumers.

The U.S. catfish industry successfully petitioned the U.S. government to require that catfish varieties imported from Vietnam be labeled as tra, basa, or pangasius. This is an example of which of the following? 0/1 pts • • a nontariff barrier • an embargo • a tariff • a direct price influence

a nontariff barrier

Export-led development refers to ________. 0/1 pts • • a country's efforts to promote its exports in order to reduce its trade deficits • a policy to promote domestic production of goods that would otherwise be imported • decreases in infrastructure development due to the loss of revenue from export tariffs • a program to promote industries with export potential

a program to promote industries with export potential

In international trade, what is a quota? 0/1 pts • • a bilateral agreement calling for mutual access to markets • a countertrade arrangement that establishes the value of imports and exports • a guarantee by one country to buy some minimum amount from another • a quantitative limit on the amount of a product that can be imported or exported

a quantitative limit on the amount of a product that can be imported or exported

An import license is ________. 0/1 pts • • a requirement that permission be secured from governmental authorities before importation can be undertaken • an agreement whereby one country gives another country permission to use a patent that a company has registered there • a government prohibition of imports from a specific country • a requirement that exporters take merchandise in lieu of money as payment for their sales

a requirement that permission be secured from governmental authorities before importation can be undertaken

Trade protectionism will most likely affect which aspect of a company's operations? 0/1 pts • • selecting employees • relocating personnel overseas • investing short-term capital • acquiring foreign supplies

acquiring foreign supplies

Which term refers to a tariff or duty assessed as a percentage of an item's value? 0/1 pts • • specific duty • compound tariff • effective tariff • ad valorem duty

ad valorem duty

Advocates of the comparable access argument for trade protection primarily assert that domestic industries ________. 0/1 pts • • are forced to lower prices for domestic consumers because of foreign import restrictions • will deteriorate in countries that have lower import restrictions than their trading partners • are entitled to the same access to foreign markets as foreign industries have to their markets • should be required to implement export-led development policies on foreign competitors

are entitled to the same access to foreign markets as foreign industries have to their markets

Successful trade retaliation is most likely achieved ________. 0/1 pts • • on agricultural products • by a small trading country • by a large trading country • on manufactured products

by a large trading country

The government of Country X imposes import restrictions on steel to help the domestic steel industry in depressed areas. What is the most likely result of such restrictions? 0/1 pts • • damaging other industries in Country X • lowering steel prices in Country X • triggering boycotts in Country X • devaluing the currency of Country X

damaging other industries in Country X

Developing countries have sometimes adopted policies to shift people out of agriculture and into industry by protecting manufactured production. One of the problems they have encountered is that ________. 0/1 pts • • developed countries have retaliated with protection of products from the developing countries • food shortages have increased in rural areas because of worker shortages • people have been too reluctant to leave rural areas to go to the cities • demand for social and political services has increased excessively in the cities

demand for social and political services has increased excessively in the cities

Exporting below cost or below the home country price is called ________. 0/1 pts • • dumping • an export-led development policy • a strategic trade policy • countertrade

dumping

The U.S. catfish industry petitioned the U.S. government for increased taxes on imported Vietnamese fish, claiming that the fish were being sold below the cost of production. The U.S. catfish industry was accusing the Vietnamese fish industry of ________. 0/1 pts • • subsidizing • dumping • using offsets • using an embargo

dumping

Country X wants to eliminate its balance of trade deficit while simultaneously keeping prices low for imported essentials. Which of the following methods would most likely achieve these dual objectives? 0/1 pts • • using tight monetary policies to deflate price levels • enacting selective import restrictions • spurring productivity increases through general tax breaks for industry • devaluing its currency

enacting selective import restrictions

There are several reasons for a company to sell products abroad at either below cost or below the price in the home country. Which of the following is one of these reasons? 0/1 pts • • gaining imports that are sold below cost • following import substitution objectives • improving the exporting country's terms of trade • encouraging foreign consumers to try new products

encouraging foreign consumers to try new products

An import tariff may be protective ________ 0/1 pts • • if it serves primarily to restrict entry of hazardous materials • even though the importing country does not produce the product • if it does not generate significant tax revenue for essential industries • only if it is on imports the country produces domestically

even though the importing country does not produce the product

Export restrictions have a tendency to ________. 0/1 pts • • encourage the development of substitutes in the restricting country • favor domestic consumers • protect employment in the export-restricted industries • lower prices in foreign markets

favor domestic consumers

Defense arguments are sometimes used to prevent exports to unfriendly countries. This runs the risk of the targeted country ________. 0/1 pts • • removing import restrictions • banding with other countries to form a cartel • finding alternative sources of supply • becoming politically destabilized

finding alternative sources of supply

Countries sometimes fear that foreign producers are pricing their exports artificially low. This fear is most likely based on the assumption that ________. 0/1 pts • • foreign producers will charge exorbitant prices after putting competitors out of business • insufficient earnings will be available to improve product technology • developing countries will be unable to maintain critical industries needed in times of war • foreign companies will lack the earnings to repay their foreign debt

foreign producers will charge exorbitant prices after putting competitors out of business

In addition to protection, tariffs serve to ________. 0/1 pts • • subsidize imports • increase consumption • generate revenue • subsidize exports

generate revenue

It is sometimes contended that by imposing import controls a country might be able to increase its exports. This contention is premised on ________. 0/1 pts • • using the import taxes to institute efficiency measures in potential export industries • getting other countries to maintain or relax their current import restrictions instead of escalating restrictions in a trade war • raising domestic prices in one industry so that the excess domestic profits in that industry can compensate for the cost of dumping products from another industry into foreign markets • the country's simultaneous currency depreciation, which decreases the price of its exports

getting other countries to maintain or relax their current import restrictions instead of escalating restrictions in a trade war

The term protectionism when applied to international trade refers to ________. 0/1 pts • • payments to dock workers to prevent pilferage of imported shipments • methods used to prevent intellectual property theft • border checks to prevent entry of illegal aliens • governmental restrictions and competitive support actions to affect trade flows

governmental restrictions and competitive support actions to affect trade flows

Which of the following is NOT causing greater complexity in the regulation of trade? 0/1 pts • • heightened concern about product safety • development of new products that must be classified • growth in export tariffs • services available over the Internet

growth in export tariffs

A physician, who is a citizen of and licensed in Country A, meets the professional licensing requirements of Country B. The physician will most likely ________. 0/1 pts • • have to work in the not-for-profit sector in Country B for a period of time before being permitted to work for a profit-seeking organization • not be allowed to work in the not-for-profit sector in Country A or Country B for a set period • have to get a work permit from Country B's immigration authorities to work in Country B • have to pass a language proficiency exam before being allowed to work in Country B

have to get a work permit from Country B's immigration authorities to work in Country B

Country X is withholding goods from international markets in an attempt to raise prices abroad. Such actions will be most effective for Country X if the nation ________. 0/1 pts • • holds a monopoly on the product or resource • provides domestic industries with tax breaks • supports the development of substitutions • receives low-interest loans from foreign banks

holds a monopoly on the product or resource

The most common type of tariff is the ________ tariff. 0/1 pts • • ad valorem • export • import • transit

import

Unemployed workers are most apt to form a pressure group to support ________. 0/1 pts • • export restrictions • import restrictions • import subsidies • price limitations

import restrictions

Which term refers to restricting imports in order to boost domestic production and consumption of goods that would otherwise be imported? 0/1 pts • • most-favored nation • in-sourcing • import substitution • terms-of-trade

import substitution

A possible drawback to the essential industry argument for import protectionism is ________. 0/1 pts • • unemployment increases in the protecting country • that such protection hurts the protecting country's balance of payments • in times of military emergency, almost any product could be considered essential • other countries find supplies elsewhere

in times of military emergency, almost any product could be considered essential

Imports can stimulate exports by ________. 0/1 pts • • increasing foreign income • curtailing domestic competition • generating more tax revenue • redistributing the work force

increasing foreign income

Companies with ________ would most likely oppose global protectionist measures. 0/1 pts • • domestically focused supply chains • multidomestic production facilities • internationally integrated supply chains • product differentiation

internationally integrated supply chains

A problem that can arise in using trade protectionism to develop international competitiveness for a domestic industry is that ________. 0/1 pts • • the protecting countries lose too much revenue from import duties • assistance should be given only if entry barriers to new firms are very low • it is difficult to identify industries that have a high probability of reaching competitiveness • a short product life cycle makes the industry quickly noncompetitive

it is difficult to identify industries that have a high probability of reaching competitiveness

The rationale for the infant-industry argument for trade protection is that ________. 0/1 pts • • it takes time for an industry to become competitive in world markets, so protection is needed to help this industry pass through the critical period • incubator centers in which business, government, and academia cooperate will develop entrepreneurial companies • a country should give one firm in an industry a monopoly status so that it will grow large enough to be competitive internationally • lower restrictions should be placed on products coming from countries where a government has a large sphere of political influence

it takes time for an industry to become competitive in world markets, so protection is needed to help this industry pass through the critical period

A voluntary export restriction (VER) refers to ________. 0/1 pts • • limits placed on exports by a government of an exporting country at the request of the government of an importing country • limits companies' exports to increase domestic supplies • requests by governments for companies to limit exports of militarily useful technology • an agreement between two countries to reciprocally restrict exports to one another

limits placed on exports by a government of an exporting country at the request of the government of an importing country

The U.S. automobile industry has attempted to counter import competition in all the following ways EXCEPT ________. 0/1 pts • • moving some production to lower-cost countries and exporting to the United States • concentrating on market niches that initially had less import competition • effecting internal adjustments, such as cost efficiencies and improved quality • lobbying for customs deposits so that importers' costs would be raised

lobbying for customs deposits so that importers' costs would be raised

According to the optimum tariff theory, a foreign producer will most likely ________. 0/1 pts • • assess a tax on goods shipped internationally based on a percentage of the goods' value • seek mport tariffs by using the comparable access argument • ship highly taxed goods internationally on a per-unit basis • lower its export prices if the importing country imposes an import tax on its products

lower its export prices if the importing country imposes an import tax on its products

All of the following are reasons a country might institute import restrictions to improve its balance of trade position with other countries EXCEPT to ________. 0/1 pts • • get comparable access for its companies • reduce imports and encourage exports • maintain essential industries • bargain away restrictions by other countries

maintain essential industries

Unlike the infant-industry argument, the industrialization argument for trade protection ________. 0/1 pts • • stresses labor-intensive production methods despite high costs • requires independence from other countries • presumes that economic growth will occur even if domestic manufactured prices are not globally competitive • emphasizes use of locally available raw materials for manufacturing inputs

presumes that economic growth will occur even if domestic manufactured prices are not globally competitive

Countries most likely establish export restrictions to ________. 0/1 pts • • retaliate against foreign import controls • reduce domestic production • encourage substitute products • raise prices in foreign markets

raise prices in foreign markets

Tied aid requires a recipient to ________. 0/1 pts • • use the capital in any way as long as donor country approval is granted • employ local workers in management positions • donate a portion of the funds to the donor country's infrastructure needs • spend the funds in the donor country

spend the funds in the donor country

Assume a government is considering import restrictions on sugar because sugar imports are hurting the domestic industry. Which of the following groups is LEAST likely to speak out on the subject? 0/1 pts • • sugar company owners • employees of sugar companies • sugar consumers • politicians in areas that grow sugar

sugar consumers

In most cases, which type of government protection assistance is most controversial? 0/1 pts • • business development services • tariffs • trade expositions • foreign business contacts

tariffs

An argument against limiting exports to unfriendly countries is that ________. 0/1 pts • • the exporting nation's cultural identity is harmed • one country's essential product is superfluous to another • the costs of the sanctions are borne by innocent people rather than by leaders • markets cannot be regained after the countries become friendly

the costs of the sanctions are borne by innocent people rather than by leaders

Assume a government places restrictions on a specific product from a specific foreign country. What would be the government's most likely concern about the foreign country's response? 0/1 pts • • the foreign producers raising the prices of their exports • the foreign country restricting its own imports • the foreign producers seeking other markets • the foreign country restricting its exports in that industry

the foreign country restricting its own imports

Terms of trade refers to ________. 0/1 pts • • specific requirements placed on imports and exports at the port of entry or exit • requirements agreed upon by two countries to regulate bilateral trade • the quantity of imports that a given quantity of a country's exports can buy • an account statement showing a country's annual imports and exports

the quantity of imports that a given quantity of a country's exports can buy

Which of the following best explains why the experience of countries such as Taiwan and South Korea are used to support export-led development policies? 0/1 pts • • their rapid economic growth • their low inflation • their increased FDI • their industry diversity

their rapid economic growth

The fact that there are few reciprocal agreements among countries on the licensing of professionals most likely means that ________. 0/1 pts • • more service functions are being handled as not-for-profit • there is an effective limitation on trade in services • people immigrate to those countries with the highest standards so as to more easily become licensed anywhere else • universities' study abroad programs do not enable students to obtain dual degrees and licenses from more than one country

there is an effective limitation on trade in services

What is the main motive for countries' protection of their film/cinema industries? 0/1 pts • • to maintain their cultural sovereignty • to improve their balance of payments • to keep prices low for their citizens • to diversify their economies

to maintain their cultural sovereignty

Managers should understand the effect of trade protectionism because ________. 0/1 pts • • trade protectionism may prevent companies' enactment of merger and acquisition agreements • trade protectionism may make it difficult for a company to buy what it needs from foreign suppliers • trade protectionism requires the payment of high insurance rates to transport goods internationally • trade protectionism may limit the number of people permitted to practice a specific profession

trade protectionism may make it difficult for a company to buy what it needs from foreign suppliers

The industrialization argument for trade protection in developing countries is based on the assumption that ________. 0/1 pts • • unemployment and underemployment exists in rural areas, so little agricultural output is lost as people move into industrial jobs • the protected industry will become competitive over time with economies of scale • subsidizing production is a better means of protection than limiting imports • it is better to depend on buying agricultural surpluses from developed countries than to produce these agricultural goods

unemployment and underemployment exists in rural areas, so little agricultural output is lost as people move into industrial jobs