INTL: Ch7
are levied as a proportion of the value of the imported good
Ad valorem tariffs
the TRIPS regulations established at the 1995 Uruguay Round:
established regulations on patents and copyrights
which of the following observations about tariffs is true
export tariffs are used to raise revenue for the government
the infant industry argument is criticized because it relies on an assumption that:
firms are unable to make efficient long-term investments by borrowing money from the domestic or international capital market
in agriculture could jump-start economic growth among the world's poorer nations and alleviate global poverty
free trade
a direct restriction on the quantity of some god that may be imported into a country
import quota
until 1995, GATT rules applied only to
industrial goods
specific tariffs are
levied as a fixed charge for each unit of a good imported
tariff rate quotas are common in agriculture, where their goal is to
limit imports over quota
according to ---, some specific fraction of a good must be produced domestically
local content requirements
tariff rates on agricultural products are generally
much higher than tariff rates on manufactured products or services
local content regulations
protect domestic producers by limiting foreign competition
identify the true statement about trade barriers
to conform to local content regulations, a firm may have to locate more production activities in a given market than it would otherwise
which of the following is a political reason for governments to intervene in markets
to protect jobs and industries
a quota on trade imposed by the exporting country, typically at the request of the importing country's government
voluntary export restraint
a requirement that some specific fraction of a good be produced domestically
a local content requirement
the threat of --- limits the ability of a firm to use aggressive pricing to gain market share in a country
antidumping action
specifies that government agencies must give preference to American products when putting contracts for equipment out to bid unless the foreign products have a significant price advantage
buy America Act
tariffs do not benefit
consumers
variously defined as selling goods in a foreign market at below their costs of production of as selling goods in a foreign market below their "fair" market value
dumping
which of the following observations about subsidies is true
government subsidies must be paid for, typically by taxed individuals and corporations
helps domestic producers to complete against foreign imports
subsidy
a common hybrid of a quota and a tariff is known as
tariff rate quota
what is one of the main instruments of trade policy
tariffs
after the Uruguay Round of GATT extended global trading rules to cover trade in services, the first two industries targeted for reform by the WTO were:
telecommunications and financial services
allows Americans to sue foreign firms that use property in Cuba confiscated from them after the 1959 revolution
Helms-Burton Act
which of the following acts allows americans to sue foreign firms that use property in Cuba confiscated form them after the 1959 revolution>
Helms-Burton Act
The Netherlands exported tulip bulbs to almost every country in the world except Japan. This was because in Japan, customs inspectors insisted on checking every tulip bulb by cutting it vertically down the middle. this is an example of which of the following trade barriers?
administrative trade policies
governments use ---- to boost exports and restrict imports
administrative trade policy
in the US, the only firms allowed to import cheese are certain trading companies, each of which is allocated the right to import a maximum number of pounds of cheese each year. this is an example of
an import quota
The Smoot-Hawley Act aimed at:
avoiding rising unemployment
strategic trade policy suggests that in industries where the existence of substantial scale economies implies that the world will profitably support only a few firms, countries may predominate in the export of certain simply because they had firms there were able to
capture first-mover advantages
according to the infant industry argument, many developing countries have a potential ----- in manufacturing, but new manufacturing industries cannot initially compete with established industries in developed countries
comparative advantage
business firms that lobby their governments to engage in protectionism have an opportunity to build a ---- by constructing a globally dispersed production system
competitive advantage
TRIPS regulations oblige WTO members to do which of the following?
comply with the rules within 10 years in the case of the poorest countries
antidumping duties are often called
countervailing duties
Paul Krugman suggests that strategic trade policy aimed at establishing domestic firms in a dominant position in a global industry is a bigger-thy-neighbor policy that
boosts national income at the expense of other countries
the highest rate that can be charged, which is often, but not always, the rate that is charged.
bound tariff rates
administrative trade policies are
bureaucratic rules designed to make it difficult for imports to enter a country
In 1997, 2 south Korean manufacturers of semiconductors, LG semiconductors and Hyundai electronics were accused of selling dynamic random access memory chips (DRAMs) in the US market at below their costs of production. it was alleged that the firms were trying to unload their excess production in the US. this is an example of:
dumping
a company that sells its products in a foreign market below the cost of production may be accused of
dumping
a key goal of the 1986 Uruguay Round was to
extend GATT rules to cover trade in services
the WTO's GATS has taken the lead to
extend free trade agreements to services
what term refers to a situation in which a government foes not attempt to restrict what its citizens can buy or sell to another country
free trade
A key issue in the "millennium round" of the WTO was to
further reduce barriers to cross-border trade and investment
many firms, of all national origins, increasingly depend on --- for their competitive advantage
globally dispersed production systems
according to the strategic trade policy argument
government support can help domestic firms overcome the first mover advantages enjoyed by foreign competitors
krugman has suggested that trade policy designed to retaliate against another country's trade policy would:
hurt the citizens of both countries
if a domestic industry lacks the capacity to meet demands, an ---- can raise prices for both the domestically produced and the imported good
import quota
WTO rules allow countries to ---- foreign goods that are being sold cheaper than at home, or below their cost of production, even when domestic producers can show that they are being harmed
impose antidumping duties on
one issue at the forefront of the current agenda of the WTO is the
increase in tariff rates on nonagricultural goods and services in many nations
According to the ---- argument, governments should temporarily support new industries until they have grown strong enough to meet international competition
infant industry
which of the following statements concerning a voluntary export restraint is true
it benefits domestic producers by limiting import competition
which of the following is a drawback of government intervention?
it may invite retaliation and trigger a trade war
according to the Buy America Act, if a company wishes to win a contract from a US government agency to provide some equipment, it must ensure that at least 51% of the product by value is manufactured in the US. this is an example of:
local content requirements
The WTO argues that removing tariff barriers and subsidies in the agricultural sector could:
lower prices to consumers
a reason for the pressure for greater protectionism that occurred during the 1980s and early 1990s
many countries found ways to get around GATT regulations
the "Millennium round" ended in 1999 with:
no agreement on the reduction of barriers to cross-border trade and investment
the extra profit that producers make when supply is artificially limited by an import quota is referred to as
quota rent
the extra profit that producers make when supply is artificially limited by an import quota is referred to as a
quota rent
inadequate protections for intellectual property
reduce the incentive for innovation
import tariffs
reduce the overall efficiency of the world economy
the US government has used the threat of punitive sanctions to try to get the Chinese government to enforce its intellectual property laws. This is an example of government intervention based on:
retaliation
raised tariff barriers in the hope of protecting jobs and diverting consumer demand away from foreign products
smoot-hawley Act
according to the --- policy, subsidies can help a firm achieve a first mover advantage in an emerging industry
strategic trade
by lowering production costs, ---- help domestic producers compete against foreign imports
subsidies
strategic trade policy suggests that a government should use ---- to support promising firms that are active in newly emerging industries
subsidies
which of the following is a consequence of subsidies
subsidies protect inefficient domestic producers
a quota rent is
the extra profit producers make when supply is artificially limited by an import quota
foreign producers typically agree to voluntary export restrictions because
they fear far more damaging punitive tariffs or import quotas might follow if they do not
which of the following is a trade barrier that affects a firm's strategy
to conform to local content regulations, a firm may have to locate more production activities in a given market than it would otherwise
the japanese government was pressurized by the US government to place limits on the number of vehicles exported to the US by Japanese automobile producers in 1981. This is an example of:
voluntary export restraint
economic problems during the great depression were compounded in 1930 when the US congress passed the ---, aimed at avoiding rising unemployment by protecting domestic industries and diverting consumer demand away from foreign products
Smoot-Hawley Act
according to the 1986 uruguay round, the ---- was to be created to implement the GATT agreement
World Trade Organization
