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