int bus ch7

________ is variously defined as selling goods in a foreign market at below their costs of production or as selling goods in a foreign market at below their "fair" market value.

Dumping

________ was a multilateral agreement established in 1947 whose objective was to liberalize trade by eliminating tariffs, subsidies, import quotas, and the like.

General Agreement on Tariffs and Trade (GATT)

How did the Smoot-Hawley Act affect employment?

It had a damaging effect on employment abroad.

High tariff barriers and subsidies in the agricultural industry ultimately lead to

increased prices for consumers.

The ________ argument was proposed by Alexander Hamilton in 1792 and is by far the oldest economic argument for government intervention.

infant industry

Which organization was created to implement the GATT agreement?

World Trade Organization

Paul Krugman characterizes strategic trade policy as being

a boost to national income at the expense of other countries.

One focus of strategic trade policy is to help domestic companies gain

a first-mover advantage.

Some countries have a policy that entirely restricts the export of coffee products. This is called a(n)

export ban.

Italy has a direct restriction on the amount of metal products that may be imported into the country. Which instrument of trade policy does this reflect?

import quota

A tariff rate quota provides a lower tariff rate to

imports within the quota.

When the management team reviewed its government contract on office furnishings, they noticed that in order to bid on the project, at least 44 percent of the value of the office furniture had to be produced in the United States. This stipulation is an example of a(n)

local content requirement.

Subsidies and quotas are examples of ________ barriers a county might impose.

nontariff

A(n) ________ refers to the extra profit that producers make when supply is artificially limited by an import quota.

quota rent

An implication of trade barriers for business practice is that they

reduce the cost of importing products to a country.

A foreign government was not enforcing its intellectual property rights, which resulted in massive copyright infringements. In turn, this was costing U.S. companies millions of dollars in lost sales revenues. To force the country to play by the rules, the United States threatened to impose trade sanctions on a range of imports from the country's businesses. The underlying motive for intervention by the U.S government was

retaliation.

A tax of 32 cents is levied for each pair of eyeglasses imported into a nation. This is an example of a(n)

specific tariff.

In order to encourage the agricultural industry, the French government provided low-interest loans for the purchase of seeds and fertilizers. The government also gave cash grants and made tax reductions. Which instrument of trade policy is being used by the French government?

subsidies

Foreign producers agree to ________ imposed by an exporting country because they fear more damaging punitive tariffs or import quotas might follow if they do not.

voluntary export restraints