Chapter 20 Globalization and Protectionism

Import Quotas

-numerical limitations on the quantity of products that can be imported -increases the price of the domestic goods to consumers Ex. a limit imposed on the number of men's suits that can be imported from a foreign country

Non Tarriff Barrier

A rule that every imported product must be opened by hand and inspected with a magnifying glass, by one of just three government inspectors available at any given time might be referred to as

Tariff

A tax on imported goods and services ex.a $1000-per-car fee imposed on all small cars imported

National Interest Argument

It is sometimes argued that nation should not depend too heavily on other countries for supplies of certain key products. This argument is commonly known as the

example of tariff

a $1000-per-car fee imposed on all small cars imported

Which of the following is the best example of a quota?

a limit imposed on the number of men's suits that can be imported from a foreign country

economic unions

addition to a common market, monetary and fiscal policies are coordinated

GATT (General Agreement on Tariffs and Trade)

compromises between nations that come about due to trade policy

During the second half of the twentieth century, trade barriers have in general:

declined quite substantially both in the U.S. economy and in the global economy.

Introducing a tariff on vitamin Z would:

increase American consumption of domestically produced vitamin Z.

Import tariffs generally ________ the output of domestic producers of the affected products and also _________ the output of domestic exporters.

increase, decrease

After the USA introduces a tariff in the market for gigastraps, the price of gigastraps in the USA will:

increase.

Economists would say tariffs:

limit voluntary exchanges.

Nontariff Barriers

nation can draw up rules, regulations, inspections, and paperwork to make it more costly or difficult to import products

Disruptive market change

new technology- causes real tradeoffs

Free trade agreements

participants allow each other's imports without tariffs or quotas

common markets

participants have a common external trade policy as well as free trade within the group

Dumping

refers to selling goods below the cost of production

race to bottom

scenario of global degradation

International trade

tariffs are taxes imposed on imported goods and services