Macro 18
Which of the following are reasons economists oppose trade restrictions?..
-Free trade increases total output. -Trade restrictions are addictive. -National security reasons to restrict trade are often abused. -Free trade increases competition.
Tariffs remain a primary source of revenue for many developing countries for the following reasons...
-Other forms of taxes have not been instituted. -They are relatively easy to collect. -They are paid by those who can afford imports.
Trade restrictions for national security reasons often take which of the following forms?..
-Restrict imports of defense related goods -Restrict exports of strategic materials -Restrict exports of defense-related goods
Which of the following are reasons countries restrict trade?..
-To avoid unequal distribution of the benefits of trade -To stimulate domestic aggregate demand -To protect national security -To increase government revenue -to be strategic in international politics
True or false: An import quota is a quantity limit on imports to raise government revenue...
FALSE
True or false: Companies that export to another country prefer tariffs rather than quotas since tariffs raise the price they receive for the product...
FALSE
True or false: Regulatory trade restrictions limit imports directly...
FALSE
True or false: The North American Free Trade Association (NAFTA) is a free trade association consisting of the United States, Canada and countries in the Pacific Rim...
FALSE
Refer to the graph shown. If the country imposes a quota of Q0 on imported goods, equilibrium price paid by the consumer will be _____...
P0
The United States imposes a tariff of T per unit on speedboats imported from Canada as shown here. Now, the equilibrium price of Canadian imported speed boats that consumers pay is likely to be ____...
P3
A country is facing a recession and is thus revising its international trade policies. Which of the following international trade policies might it consider to address the recession?...
Restrict imports
Overall, since 1928, international trade as a percent of the total world production has _____...
Risen
True or false: Tariffs can help to pay for domestic infrastructure...
TRUE
True or false: The European Union (EU), among other things, can be considered a free trade association...
TRUE
True or false: The World Trade Organization has a system to enforce trade agreements...
TRUE
In what ways do quotas differ from tariffs?...
Tariffs decrease the price producers receive; quotas do not.
Which of the following is an example of a sanction?...
The U.S. does not allow U.S. citizens to purchase goods from North Korea.
Which of the following is a reason economists generally oppose trade restrictions?..
Trade increases global output.
The comparative advantage argument for free trade assumes that...
a country is fully utilizing its resources.
The General Agreement on Tariffs and Trade (GATT) is...
a regular international conference to reduce trade barriers.
Programs designed to compensate those who are hurt when trade restrictions are loosened or removed are called trade _____...
adjustment assistance programs
Countries may opt for voluntary restraints on their exports to...
avoid having new tariffs imposed on goods by foreign countries.
When a company is experiencing economies of scale...
costs per unit of output are falling as production rises.
One difference between the effect of a tariff and a quota is that a tariff...
creates revenue for the domestic government, while a quota does not.
Free trade associations are...
groups of countries that have reduced or eliminated trade barriers among themselves.
An import quota...
increases the price of the imported good to the consumer.
If a country has a trade deficit...
its imports exceed its exports and it is consuming more than it is producing.
Regulatory trade restrictions...
may be a legitimate attempt to address quality concerns.
If the United States has a trade surplus, it must be...
producing more than it is consuming.
An example of a regulatory trade restrictions is...
prohibition of importing vegetables because of certain pesticide usage.
The World Trade Organization (WTO) works to...
promote free and fair trade
The United States imposes a tariff on machines imported from other countries. The likely impact on the price and quantity of imports sold in the United States is...
rise in price paid by less than the tariff and reduction in quantity imported.
Firms that export to other countries prefer quotas over tariffs because...
they raise the price they receive for a smaller quantity of goods that they sell.
