IR ch 11
Which best defines a quota?
. A restriction on the quantity of goods that can be imported to or exported from a country
The GATT principle that called for mutual lowering of trade barriers between trading partners was known as
. reciprocity
How might the Prisoner's Dilemma from Chapter 9 apply to free trade and protectionism?
Free trade is the most desirable outcome in the global economy; therefore, all states will comply with the global norms of cooperation.
An open international economy is a collective good.
false
Liberals emphasize the mutual gains (absolute gains) of global trade whereas mercantilists are more concerned with relative gains.
false
The trade theory of liberalism holds that open trade borders and minimal government intervention will maximize global welfare.
false
The transnationalization of the productive process in which finished goods rely on inputs from multiple countries outside their final market is known as
globalization of production
An infant industry is one that
is not yet strong enough to compete effectively in the global marketplace.
The globalization and outsourcing of labor is most problematic for which sector of laborers?
low skilled
Mercantilists differ from liberalists in all of the following ways except,
mercantalists would advocate for free trade over protectionism.
The mercantilist school of thought posits that states can maximize their wealth and welfare by
playing an active role in the economy and accumulating resources.
When Brazil sued the United States for cotton subsidies that violated international trade law standards, the United States began sending annual payments of $150 million to Brazil in exchange for their dropping the case.
true
A good that everyone benefits from and from which no one can be excluded is a(n)
collective, or public good
The economist credited with the idea of comparative advantage is
David Ricardo
Which of the following is NOT an example of a non-tariff barrier?
Health and safety regulations
Which of the following best describes comparative advantage?
If a state can produce the highest volume of wool in the world, that state should produce wool regardless of opportunity cost.
As the WTO has been largely successful in reducing tariffs, it has begun to confront all but which of the following issues?
Security issues
Voluntary export restrictions (VERs) are agreements in which exporting countries agree to restrict shipments of a particular product to a country to deter it from imposing an even more onerous import quota.
true
A hegemon must do all of the following to maintain the international political economy?
all of the above
How might the growth of FDI produce a level of social homogeneity?
all of these are true
When taxes are placed on another exporting state's alleged selling of a product at a price below the cost to produce it, this is called
antidumping duties
According to the most-favored-nation (MFN) principle,
tariff preferences granted to one state must be granted to all others exporting the same product.
The GATT principle of nondiscrimination that called for all foreign goods to be treated equally with domestic goods, and that countries are not able to enact policies, such as taxes, to give their products an advantage over foreign products is called
transparency
As trade integration grows, so does globalization because states' interdependence increases when exports account for an increasing percentage of their gross domestic product.
true
GATT stands for General Agreement on Tariffs and Trade.
true
In The Wealth of Nations, Adam Smith argues for the idea of a nation specializing in goods in which it has a comparative advantage.
true
Intra-firm trade is cross-national trade of international goods and services within the same firm.
true
The primary goal of the GATT was to open or liberalize world trade using the principles of reciprocity, nondiscrimination, and transparency.
true
The production of goods is usually dispersed throughout several different countries.
true
