Final Exam GLobal
29. The average tariff rate today on dutiable imports in the United States is approximately:
5 percent of the value of imports
15. Under the original provisions of the Reciprocal Trade Agreements Act the president of the United States was authorized to cut tariffs up to:
50 percent
1. The high point of U.S. protectionism occurred with the passage of the Kennedy Act in the 1960s.
False
12. The only members of the General Agreement on Tariffs and Trade and its successor the World Trade Organization are developing countries rather than developed countries.
False
15. The main focus of the Uruguay Round of multilateral trade negotiations was on tariff barriers rather than nontariff trade barriers.
False
16. Although the Uruguay Round of multilateral trade negotiations succeeded in reducing nontariff trade barriers it could not achieve reductions in tariff trade barriers.
False
18. Under the government procurement policy of the World Trade Organization federal-state-local governments are prevented from discriminating in favor of the products of domestic suppliers on contracts valued at $1 million and mor
False
21. According to U.S. trade law the escape clause provides relief to U.S. firms due to unfair foreign competition.
False
23. The purpose of "countervailing duties" as levied by the domestic government is to neutralize import tariffs imposed by foreign governments.
False
25. Economic theory suggests that if France is a net importer of automobiles whose production is subsidized by the Korean government the overall welfare of France decreases because of the Korean subsidy.
False
26. An antidumping duty levied on imports of foreign-produced steel leads to an increase in consumer surplus in the home country.
False
28. Intellectual property refers to holdings of rare books and pieces of art that are traded on the world market.
False
30. Under the trade adjustment assistance program a domestic firm or worker can file for governmental assistance only if it demonstrates that it suffered economic hardship due to imports of foreign-subsidized goods.
False
31. Industrial policy attempts to foster the development of industries that offer long-run comparative disadvantages and which are insulated from other sectors of the economy.
False
32. During the post World War II era the United States has adopted explicit industrial policies similar to those of France and Japan.
False
33. Industrial policies of the U.S. government have included subsidizing particular firms to promote national champions nationalizing basic industries and encouraging cartelization of industries.
False
34. The Export-Import Bank provides export-credit subsidies to U.S. producers of agricultural goods.
False
38. If the U.S. government pursued a "knowledge-based growth policy" it would subsidize particular firms to help them compete in the world economy.
False
4. It is generally agreed that the Smoot-Hawley Act of 1930 led to improvements in U.S. exports and an overall increase in U.S. output and employment.
False
40. Unlike Japan and the United States France has refrained from forming explicit industrial policies to enhance the competitiveness of its national champions.
False
42. The strategic-trade-policy hypothesis assumes that domestic firms operate under increasing cost conditions as well as in perfectly competitive markets.
False
44. The classical theory of comparative advantage assumes that firms operate in imperfectly competitive markets while the theory of strategic trade policy assumes that firms operate in perfectly competitive markets.
False
46. By reducing available supplies of a product an export embargo leads to falling prices in the target nation and increasing target-nation consumer surplus.
False
48. Economic sanctions are most effective in pressuring the target country to modify its behavior when the sanctions are imposed by a small number of countries and when the target country had weak economic ties to the imposing countries before the sanctions were initiate
False
49. It is widely recognized that the economic sanctions levied against Iraq in 1990 were a major factor causing Iraq to withdraw its military forces from Kuwait.
False
50. Assume that Russia has a comparative advantage in vodka. If the United States extends Russia the benefits of the normal-trade-relations (most-favored-nation) principle U.S. consumer surplus decreases in the vodka market.
False
52. Concerning industrial policy the United States has nationalized its major industries in an attempt to promote global champions.
False
55. The World Trade Organization brings into the multilateral trading system manufactured goods and agricultural products but not trade in services intellectual property protection and investment.
False
56. The General Agreement on Tariffs and Trade was founded in 1995 as a successor to the World Trade Organization.
False
9. According to the General Agreement on Tariffs and Trade and its successor the World Trade Organization only bilateral trade negotiations can take place between a country and its trading partners.
False
33. Industrial policy attempts to fulfill all of the following objectives except:
Fostering industries which offer long-run comparative disadvantage
21. Suppose the United States imposes trade sanctions (export quotas) on grain sold to the Russians. Assuming other nations do not increase grain exports to the Russians all of the following would occur except:
Grain prices would rise in the United States
57. The implicit industrial policies of the U.S. government have included:
Improving the setting for industry such as communications and infrastructure
34. Countervailing duties may be imposed:
In response to a foreign export subsidy
3. Adjustment assistance is sometimes used to assist:
In retraining workers displaced by imports
5. The Smoot-Hawley Tariff Act of 1930 has generally been associated with:
Intensifying the worldwide depression
14. Trade theory suggests that the United States would gain from a subsidy provided by Japan to its calculator producers if the gains to American consumers of calculators more than offset the losses to American calculator producers. This occurs as long as the United States:
Is a net importer of calculators
31. In 1990 the United States and its allies imposed trade embargoes on exports/imports to/from Iraq in response to its invasion of Kuwait. The embargoes would induce smaller losses in Iraq's consumer surplus the:
Lesser its initial dependence on foreign products
28. The Uruguay Round of trade negotiations lowered:
Tariffs as well as nontariff trade barriers
2. Under U.S. commercial policy the escape clause results in:
Temporary quotas granted to firms injured by import competition
23. Export embargoes induce greater losses in consumer surplus for the target country:
The more inelastic the target country's supply schedule
8. Which policy reflects the notion that if society enjoys gains due to increased efficiency stemming from trade liberalization some sort of compensation should be provided to those who are temporarily hurt by import competition?
Trade adjustment assistance
20. __________ attempt to produce a fair and free-trading environment in which there exists a level playing field
Trade-remedy laws
10. Members of the General Agreement on Tariffs and Trade and its successor the World trade through Trade Organization agree to the principle of nondiscrimination in trade and the reduction of trade barriers by multilateral negotiations.
True
11. The Uruguay Round of trade negotiations resulted in the General Agreement on Tariffs and Trade being succeeded by the World Trade Organization.
True
13. According to the fast-track provision of U.S. trade law once the President has completed trade negotiations their outcome is subject to a vote (without amendment) in Congress within 90 legislative days of submission.
True
14. The fast-track provision of U.S. trade law has the affect of speeding up the timetable during which the President negotiates trade agreements with foreign governments.
True
17. Among the codes of conduct addressed at the Tokyo Round of multilateral trade negotiations were customs valuation product standards subsidies and countervailing duties government procurement policies and import licensing procedures.
True
19. Unlike the Tokyo Round of multilateral trade negotiations the Uruguay Round addressed the issues of intellectual property protection trade barriers in services and agricultural subsidies.
True
2. With the passage of the Smoot-Hawley Act in 1930 U.S. average tariffs were raised to over 50 percent on protected imports.
True
20. The U.S. trade-remedy laws attempt to redress hardships for U.S. firms resulting from actions and policies of foreign firms and governments.
True
22. According to the escape clause temporary trade restrictions may be imposed in industries where domestic producers are substantially being harmed by surging imports.
True
24. Under the provisions of the World Trade Organization Canada would have the right to impose countervailing duties on imports of South Korean steel when the South Korean government provides export subsidies to its steelmakers.
True
27. U.S. antidumping duties are intended to neutralize exports to the United States at prices below average total cost or exports to the United States at prices lower than those charged in the exporter's home market.
True
29. Copyrights trademarks and patents are used to protect the intellectual property of a nation from foreign imitators.
True
3. Proponents of the Smoot-Hawley Act of 1930 viewed it as a means of combating domestic unemployment.
True
35. Major beneficiaries of export-credit subsidies granted by the Export-Import Bank have included U.S. producers of aircraft telecommunications and power-generating equipment.
True
36. The Commodity Credit Corporation makes available export credit financing for U.S. agricultural exports.
True
37. As a way of helping U.S. business firms trade in the world market on a more equal terms with their organized foreign competitors the U.S. government permits them to form export trade associations and export trading companies.
True
39. In the post World War II era the Japanese government formed industrial policies to encourage the development of its steel auto shipbuilding and machine tool industries.
True
41. According to the strategic-trade-policy hypothesis governmental subsidies granted to domestic producers can help them in capturing economic profits from foreign competitors.
True
43. According to the strategic-trade-policy hypothesis government can alter the terms of competition to favor domestic companies thus increasing their profits at the expense of their rivals.
True
45. According to the strategic-trade-policy hypothesis a subsidy granted to domestic exporters may lead to increased export profits which more than offset the cost of the subsidy to domestic taxpayers.
True
47. Assume that the United States is the only supplier of grain to China and that it levies a partial export embargo against China.The embargo leads to increased U.S. welfare if the resulting improvement in the U.S. terms of trade with China more than offset the costs of the lower export volume to China
True
5. According to the Reciprocal Trade Agreements Act of 1934 the President could lower tariffs by up to 10 percent of the existing level without congressional approval.
True
51. Assume that the United States imports chemicals from Germany. Trade theory predicts that if the German government grants an export subsidy to its chemical firms the overall welfare of the United States will increas
True
53. The Uruguay Round of multilateral trade negotiations succeeded in establishing the World Trade Organization.
True
54. Established in 1995 the World Trade Organization took charge of administering the new global trade rules agreed in the Uruguay Round of multilateral trade negotiations.
True
6. Under the normal-trade-relations (most-favored-nation) principle two nations agree to apply tariffs to each other at rates as low as those applied to any other nation.
True
7. According to the normal-trade-relations (most-favored-nation) principle if the United States extends MFN treatment to China and then grants a low tariff on imports of shirts from South Korea the United States is obligated to provide the identical low-tariff on imports of shirts from China
True
8. U.S. tariffs on imports from countries issued normal-trade-relations (most-favored-nation) status are often three or four times as high as those on comparable imports from nations not receiving that status.
True
22. In 1980 the United States announced an embargo on grain exports to the Soviet Union in response to the Soviet armed invasion of Afghanistan. The embargo was mainly resisted by:
U.S. farmers and grain companies
39. In 1986 the United States enacted the Comprehensive Anti-Apartheid Act which provided for all of the following except the termination of:
U.S. imports of all South African goods
32. In U.S. trade law Section 301 cases involve accusations of:
Unfair trade practices by foreign nations
1. The World Trade Organization was established by the __________ of multilateral trade negotiations.
Uruguay Round
38. The most recent round of multilateral trade negotiations was the:
Uruguay Round
16. The U.S. "trade-remedy laws" could establish all of the following except:
Economic sanctions levied against hostile nations
36. In U.S. trade law which measure permits the levying of restrictions on fairly traded imports that harm or threaten to harm American manufacturers?
Escape clause
7. Under U.S. commercial policy which clause permits the modification of a trade liberalization agreement on a temporary basis if serious injury occurs to domestic producers as a result of the agreement?
Escape clause
24. Suppose the president lowers tariffs on radios as the result of negotiations under the trade agreements program. Radio producers in the United States can appeal under the:
Escape clause if rising imports substantially injure the U.S. radio industry
4. The Export-Import Bank of the United States encourages American firms to sell overseas by providing direct loans and loan guarantees to foreign purchasers of American goods. To American firms this represents a (an):
Export subsidy
19. As a way of helping American firms trade in the world market U.S. trade law provides antitrust exemptions for horizontal combinations of American firms engaged solely in export trade.Such firms are permitted to form:
Export trade associations
11. For the United States which organization makes loans to foreign buyers of U.S. manufactured goods?
Export-Import Bank
9. The Uruguay Round of Multilateral Trade Negotiations accomplished all of the following except:
Achieved cuts in tariffs but not in nontariff trade barriers
26. The strongest political pressure for a trade policy that results in higher protectionism comes from:
Domestic workers lobbying for import restrictions
6. A trade policy designed to alleviate some domestic economic problem by exporting it to foreign countries is known as a (an):
Beggar-thy-neighbor policy
35. The World Trade Organization provides for all of the following except:
Bilateral tariff reductions
18. Throughout the post-World War II era the importance of tariffs as a trade barrier has:
Decreased
25. During the past four decades:
NTBs have increased and tariffs have decreased in importance
27. The Uruguay Round of trade negotiations was primarily concerned with:
Nontariff trade barriers
30. Those who argue in favor of import protection generally give the impression that such restricted trade will:
Provide benefits to the entire nation
17. The principle of normal trade relations (most-favored-nation) treatment was established with the passage of the:
Reciprocal Trade Agreements Act of 1934
10. The General Agreement on Tariffs and Trade and its successor the World Trade Organization have resulted in:
Reductions in trade barriers via multilateral negotiations
58. Economic sanctions are most effective in causing the target nation to modify its behavior when the:
Sanctions are levied by a large number of nations
1. Which of the following is not a major factor that encourages developing nations to form international commodity agreements?
Secular increases in their terms of trade
12. The high point of U.S. protection culminated with the passage of the:
Smoot-Hawley Act of 1930
13. Countervailing duties are intended to neutralize any unfair advantage that foreign exporters might gain over domestic producers because of foreign:
Subsidies
37. Which international organization stipulates procedures for the settlement of international trade disputes?
World Trade Organization
59. In 1995 the __________ was established to administer the new global trade rules agreed in the Uruguay Round of multilateral trade negotiations.
World Trade Organization
60. In 1995 the General Agreement on Tariffs and Trade was replaced by the __________.
World Trade Organization
