Chapter 6 Test #2

Restrictions on the convertibility of a currency into other currencies are referred to as ________. A. currency controls B. currency crisis C. administrative delays D. local content requirements

A. currency controls

A tariff levied by the government of a country that is selling goods abroad is called a(n) ________. A. export tariff B. specific tariff C. ad valorem tariff D. compound tariff

A. export tariff

The Uruguay Round of Negotiations created the TRIPS Agreement to ________. A. help standardize the intellectual property rules around the world B. increase the exposure of national agricultural sectors to market forces C. drastically reduce tariffs and nontariff barriers in agricultural trade D. include international trade in services for the first time

A. help standardize the intellectual property rules around the world

Scenario: Excelsior's Limited Excelsior's Limited, a manufacturer of health and beauty aids, is expanding its presence in several countries around the world. Excelsior's president is surprised at some of the responses the company is receiving from other countries. Excelsior's Limited tried to sell its product in Canada, but was told that at least forty percent of the product must be manufactured in Canada. This is an example of a(n) ________. A. local content requirement B. tariff C. administrative delay D. embargo

A. local content requirement

A country imposes a tariff on goods that it sells abroad at the request of another nation. This is an example of a(n) ________. A. voluntary export restraint B. ad valorem tariff C. compound tariff D. embargo

A. voluntary export restraint

Which of the following financial companies in the United States is involved in activities of selling of goods abroad, and offers insurance on foreign accounts receivable? A. National Cooperative Bank B. Export-Import Bank C. Overseas Private Investment Corporation D. Inter-American Development Bank

B. Export-Import Bank

Which of the following statements is true of export financing? A. The Ex-Im Bank finances the export activities of companies all over the world. B. Governments may promote exports by offering loan guarantees. C. Small businesses that have just started to export are financially stable and seldom require financing from government agencies. D. Governments usually offer loans to exporters with above-market interest rates.

B. Governments may promote exports by offering loan guarantees.

Which of the following best describes the infant industry argument? A. It states that protecting a country's emerging industries from international competition will enhance domestic companies' incentives to obtain knowledge to be competitive. B. It states that a country's emerging industries need protection from international competition during their development until they become sufficiently competitive. C. It states that small businesses that have just started to export are financially stable and seldom require financing from government agencies. D. It states that domestic companies that are provided protection from international competition become more competitive and less reliant on protection.

B. It states that a country's emerging industries need protection from international competition during their development until they become sufficiently competitive.

Which of the following statements is true of tariffs? A. They increase products' appeal to buyers. B. They protect domestic producers. C. They lower the effective prices of imports. D. They are the major source of government revenue in developed nations.

B. They protect domestic producers.

Which of the following industries is typically protected for national security reasons? A. automobile B. agriculture C. housing D. textile

B. agriculture

Which of the following statements is true about cultural influences? A. The culture of the United States is readily adapted into the local culture of countries all over the world. B. Culture and trade are independent of each other. C. Unwanted cultural influence in a nation can cause governments to block imports that it believes are harmful. D. The cultures of countries are independent of the effects of exposure to the people and products of other cultures.

C. Unwanted cultural influence in a nation can cause governments to block imports that it believes are harmful.

Which of the following is an example of a dual use product? A. a food processor B. a vacuum cleaner C. a GPS navigation device D. a blowdryer

C. a GPS navigation device

Scenario: Not-So-Free Freeland Freeland is a semi-closed economy whose government believes in protecting national identity and building a self-sustained economy. The government's priority is to protect local jobs and provide opportunities to Freeland's emerging industries to flourish without the threat of external competition. The belief that Freeland's emerging industries need protection from international competition during their development phase is an example of ________. A. the political motive of Freeland B. a local content requirement C. the infant industry argument D. a normal trade relation

C. the infant industry argument

Scenario: Konesia Joins the World Konesia, a former totalitarian economy and pariah state, is taking steps toward a free market economy. The government wants to encourage trade but also wants to find a balance so that local businesses and industries are not harmed. If Konesia chooses to levy tariffs as a percentage of the stated price of an imported product, this would be an example of a(n) ________. A. specific tariff B. tariff-quota C. compound tariff D. ad valorem tariff

D. ad valorem tariff

A requirement that all WTO members extend the same favorable terms of trade to all members that they extend to any single member is called ________. A. antidumping duties B. countervailing duties C. local content requirements D. normal trade relations

D. normal trade relations