Chapter 34 Quiz

The United States national minimum wage is _____________.

$7.25/hour

The acronym GATT stands for:

General Agreement on Tariffs and Trade.

_____________ are numerical limitations on the quantity of products that can be imported.

Import quotas

It is sometimes argued that nation should not depend too heavily on other countries for supplies of certain key products. This argument is commonly known as the _______________.

National Interest Argument

A tariff differs from a quota in that a tariff is:

a tax imposed on imports, whereas a quota is an absolute limit to the number of units of a good that can be imported.

Suppose the government of Taiwan subsidized its watch-making industry, enabling Taiwanese producers to undersell foreign watch producers. The law of comparative advantage indicates that watch-importing nations would best take advantage of the Taiwanese subsidization policy by:

accepting the subsidy of the Taiwanese government, making the appropriate adjustment for the resources temporarily displaced from the domestic watch-making industry.

As international trade increases, it contributes to a shift in jobs away from industries where that economy does not have a(n) __________ advantage and toward industries where it has a(n) ___________ advantage.

comparative; comparative

During the second half of the twentieth century, trade barriers have in general:

declined quite substantially both in the U.S. economy and in the global economy.

Which of the following is not a short-run impact of imposing quotas on the American industries they seek to protect?

government tax revenues increase

Tariffs are taxes imposed on _________________.

imported products

A new American import quota on imported steel would be likely to:

increase American production of steel.

Import tariffs generally ________ the output of domestic producers of the affected products and also _________ the output of domestic exporters.

increase; decrease

Introducing a tariff on vitamin Z would:

increase American consumption of domestically produced vitamin Z.

Economists would say tariffs:

limit voluntary exchanges.