International Business Quiz Ch. 7-8 Trade Intervention and Foreign Direct Investment Dr. Smith

Which three countries implemented NAFTA?

A. Canada, Mexico, and the United States

Tariffs cause damage to _____ because this group must pay more for certain imports.

A. Consumers

_____ take many forms including cash grants, low-interest loans, tax breaks, and government equity participation in domestic firms.

A. Subsidies

According to the text, a firm will favor FDI over exporting as an entry strategy when:

A. The transportation costs or trade barriers are high

The _____ of foreign direct investment refers to the amount of FDI undertaken over a given period (normally a year). The _____ of foreign direct investment refers to the total accumulated value of foreign-owned assets at any time.

A. flow; stock

A _____ eliminates trade barriers between member countries and adopts a common external trade policy.

B. Customs Union

Which of the following groups is thought by experts to benefit from the imposition of tariffs?

B. Governments and Producers

A common market includes all of the following characteristics, EXCEPT:

B. Harmonization of members' tax rates, and a common monetary and fiscal policy.

An agreement between countries in a geographic region to reduce tariff and non-tariff barriers to the free flow of goods, services, and factors of production between each other is referred to as:

B. Regional Economic Integration

At one time, the French government required that all imported videocassette recorders arrive in France through a small customs entry point that was both remote and poorly staffed. This policy, which in effect made it impractical for a foreign company to export videocassette recorders to France, is an example of a(n):

C. Administrative Trade Policy

Since World War II, _____ has been the largest source country for FDI.

C. The United States

Nowhere has the movement toward regional economic integration been more successful than in:

D. Europe

Which of the following is a government payment to a domestic producer?

D. Subsidy