International Business Connect Chapter 7 SmartBook

extra profit producers make when supply is artificially limited by an import quota

quota rent

Which country was the first to officially follow a policy of free trade in the mid 1800s? Great Britain United States Sweden France

Great Britain

The economic success of ______ put a strain on the world trading system in the 1980s and promoted protectionism measures. Germany Japan Mexico the United States

Japan

Which economist was a key figure in the early free trade movement in Great Britain? Marx Samuelson Keynes Ricardo

Ricardo

Enacted in 1930 by the U.S. Congress, this act erected a wall of tariff barriers against imports into the United States.

Smoot-Hawley Act

tariff levied as a fixed charge for each unit of good imported

Specific Tariff

Financial support from the government to help compete against foreign competitors

Subsidies

permit a specific quantity of imported goods to enter the country under a reduced rate while those exceeding the quantity are charged at a higher rate.

Tariff Rate Quota

Which round of GATT negotiations provided enhanced protection for intellectual property and significantly reduced barriers to trade in textiles? The Bretton Woods Round The DOHA Round The Washington Round The Uruguay Round

The Uruguay Round

T/F To limit imports over quota, tariff rate quotas would be used for agricultural products to limit the amount entering a country.

True

a trade agreement to dramatically lower trade barriers worldwide; created the World Trade Organization

Uruguay Round

Based on the theories of Ricardo and Smith, the consequences of free trade include ______ economic gains in terms of economic growth and wealth creation.

dynamic

economic policy of not discriminating against exports to or imports from foreign countries

free trade

During the 1980s, the trend was for ______ protectionism around the world. greater lesser

greater

Political opposition to the WTO has been ______ in many nations. banned declining growing

growing

Krugman argues that strategic trade policy should not be embraced because many times governments are influenced by politically important ______to intervene in the economy. interest groups domestic firms consumers foreign heads of state

interest groups

In response to the apparent failure of the current Doha Round, many nations have implemented ______. better intellectual property rights multilateral trade agreements higher tariff barriers farm subsidies

multilateral trade agreements

Import quotas are based on the ______ of a good.

quantity

Member nations hoped that the WTO would be a facilitator of future trade deals especially in the area of ______. services manufacturing technology logistics

services

The trade sanctions on Iraq that were imposed in 1991 after the Gulf War are an example of ______. using trade policy to punish rogue states using economic sanctions to direct organizational policy encouraging domestic firms to increase their production implementing export barriers to improve domestic production

using trade policy to punish rogue states

voluntarily imposed limits on the number or volume of products exported to a particular country

voluntary export restraints

What is NOT included in the Doha agenda? phasing out subsidies to agriculture producers reducing cross-border investment barriers raising tariffs on industrial services limiting antidumping laws

raising tariffs on industrial services

infant industry argument strategic trade policy

reasons for economic intervention

Which instrument of trade policy has been in use the longest? A. antidumping B. tariffs C. local content requirements D. import quotas

tariffs

Krugman promoted the idea that if each country seeks to follow a strategic trade policy to protect its interests, this may lead to ______. free trade local content requirements a trade war a trade restriction

a trade war

a requirement that some specific fraction of a good be produced domestically

local content requirement

bureaucratic rules designed to make it difficult for imports to enter a country Japan is the master of this

administrative trade policies

The ______ Round started in 2001 and continues today to deal with the issues of agriculture protectionism, protection of intellectual property, and other priorities of the WTO. Berlin Doha Washington Uruguay

Doha

What can a country use to counteract a country that uses subsidies to support an industry? reduce local content requirements establish anti-dumping regulations engage in a licensing deal establish export tariffs

establish anti-dumping regulations

Tariff rates on agricultural products tend to be ______ tariff rates on manufactured good. higher than lower than similar to

higher than

a limit on the number of products in certain categories that a nation can import

import quota

protect jobs/industries protect national securities retaliating protect consumers from dangerous products furthering foreign policy objectives protecting human rights

reasons for government intervention