Quiz 5

________ refers to a government measure intended to manage or prevent the export of certain products or trade with certain countries. Quota Export control Customs Subsidy

Export control

In Cadmia, foreign-owned automobile manufacturing companies must be managed by a Cadmian national and most board members must be Cadmian citizens. This exemplifies ________. FDI and ownership restrictions administrative and bureaucratic procedures Regulations and technical standards Anti-dumping duty

FDI and ownership restrictions

________ refer to rules that limit the ability of foreign firms to invest in certain industries or acquire local firms. Quotas Regulations and technical standards FDI and ownership restrictions Administrative and bureaucratic procedures

FDI and ownership restrictions

________ are checkpoints at the ports of entry in each country where government officials inspect imported products and levy tariffs. Nontariff trade barriers Customs Quotas Subsidies

Customs

Which of the following statements is true about protection of an infant industry? - Governments can impose temporary trade barriers on foreign imports to ensure that young firms gain a large share of the domestic market. - Such protection is easy to remove. - Protected companies become more efficient and produce products with lower prices. - Protecting infant industries rarely allows countries to develop a modern industrial sector.

Governments can impose temporary trade barriers on foreign imports to ensure that young firms gain a large share of the domestic market.

________ are transfer payments or tax concessions made directly to foreign firms to entice them to invest in the country. Investment incentives Antidumping duties Countervailing duties Quotas

Investment incentives

Which of the following is true with regard to protectionism? - It increases the availability of raw materials for domestic industries. - It decreases the cost of products sold in the home market. - It increases the availability of products sold in the home market. - It can trigger retaliation from foreign governments, which reduces sales prospects for exports.

It can trigger retaliation from foreign governments, which reduces sales prospects for exports.

Under the ________, Canada, Mexico, and the United States have eliminated nearly all tariffs on product imports from each other. APEC FTAAP GATT USMCA

USMCA (could also be NAFTA)

Governments support domestic industries by ________. incentivize dumping increase the costs of production of domestic industries alienate domestic industries adopting procurement policies that restrict purchases to home-country suppliers

adopting procurement policies that restrict purchases to home-country suppliers

Nontariff trade barriers have increased in popularity partly because they ________. generate profits for foreign firms are easier to conceal from the WTO restrict trade by imposing direct tax have been fairly successful in eliminating smuggling along international borders

are easier to conceal from the WTO

Tariffs that are ad valorem are ________. - based on the weight or size of the imported product - assessed as a percentage of the imported product's value - intended to provide a steady flow of income for the government - charged regardless of the imported product's value

assessed as a percentage of the imported product's value

The Chinese government's policy of requiring foreign firms to enter the Chinese market via joint ventures is intended to ________. limit the amount of FDI create jobs for Chinese workers protect China's national security stimulate foreign investment

create jobs for Chinese workers

Restrictions on the outflow of hard currency from a country or on the inflow of foreign currencies is called ________. antidumping duty currency appreciation currency control currency depreciation

currency control

An import license refers to a(n) ________. - tax charged on an imported product whose price is below usual prices in the local market - list of complex procedures imposed on importers that hinder trade and investment - complicated system of establishing quotas - government authorization granted to a firm for importing a product

government authorization granted to a firm for importing a product

Typically, administrative and bureaucratic procedures ________. speed up the investment activities of firms hinder the activities of importers boost investment activities harm late importers

hinder the activities of importers

A government policy that impedes trade through means other than explicit tariffs is known as a(n) ________. investment incentive subsidy maquiladora nontariff trade barrier

nontariff trade barrier

Protectionist policies may also lead to ________. price inflation increased choices for buyers easy availability of products high incentive to improve quality

price inflation

A quantitative restriction on specific imports for a set period of time is referred to as ________. tariff quota investment barrier country risk

quota

Blocking imports ________. increases the availability of raw materials increases the availability of products sold in the home market reduces the availability of products sold in the home market decreases the cost of products sold in the home market

reduces the availability of products sold in the home market

The so-called ________ specifies that a certain proportion of products and supplies, or of intermediate goods used in local manufacturing, must be produced within the bloc. safe harbor local content requirement rules of origin requirement ad valorem tariff

rules of origin requirement