Lesson 6
Which of the following is NOT true about dumping: A.Dumping may be the result of predatory behavior. B.Dumping may be defined as selling goods below their cost of production. C.Dumping may be defined as selling goods below their fair market value. D.Dumping may be used to build hidden inventories in foreign countries.
Dumping may be used to build hidden inventories in foreign countries
A key breakthrough at the WTO has been the substantial and long-overdue reduction of agricultural subsidies in the developed world. True or False
False
Administrative policies are business practices aimed at influencing governments to adhere to fair or free trade policies. True or False
False
Subsidies, which include cash grants, low-interest loans, tax breaks and government equity participation, are made to foreign firms exporting into the country. True or False
False
The infant industry argument is a recent defense used by many developing countries to seek trade concessions from more powerful, advanced nations which otherwise would destroy local businesses unable to fend for themselves in today's global markets. True or False
False
A local content requirement demands that some specific fraction of a good be produced domestically, either in value terms or in physical terms as a set percentage. True or False
True
Because of their pivotal role in international trade, firms can and do exert a strong influence on government policy toward trade. True or Flase
True
During the 1980s and early 1990s, the world trade system erected under GATT came under pressure with calls for increased protectionism due to Japan's growing success and increasing trade deficits in the United States. True or False
True
Strategic trade policy can create problems by creating a beggar-thy-neighbor policy and by focusing on special interest groups. True or False
True
The modern trading system is based on the World Trade Organization, the successor to the General Agreement on Trade and Tariffs. True or False
True
When the WTO met in Seattle during 1999, frictions increased between the US and EU over agricultural quotas, and riots broke out over environmental and trade issues. The resulting collapse of these talks moved the WTO from the domain of economists into the public square. True or False
True
The extra profit producers make when supply is artificially limited by quota is called: A.a quota rent. B.a market tax. C.a tariff waiver. D.a reduction.
a quota rent
Which of the following is not one of the political arguments for government intervention in international trade? A.Protecting jobs and industries B.Balancing the federal government budget with increased tariffs C.Retaliating against other governments' trade policies D.Protecting consumers
balancing the federal government budget with increased tariffs
The TRIPS Agreement obligates WTO members to: A.police drug trafficking. B.monitor currency trading. C.enforce registered patents. D.report violated licenses.
enforce registered patents
When foreign imports flood a domestic market intending to capture customers or hurt local firms, most governments will: A.declare war. B.begin boosting exports. C.impose countervailing duties. D.seize foreign goods.
impose countervailing duties
in 1992 the Uruguay Round of GATT sought to protect the ____of advanced nations: A.coal subsidies B.cattle industries C.intellectual property D.nuclear technology
intellectual property
A tariff rate quota is: A.lower to exports within a quota. B.lower to imports within a quota. C.higher to exports within a quota. D.higher to imports within a quota.
lower to imports within a quota
Which of the following is NOT one of the ways trade barriers constrain a firm's strategy? A.Trade barriers raise costs of exporting products. B.Quotas may limit a firm's ability to serve a country from locations outside that country .C.A firm may have to locate more activities to a country due to local content regulations .D.Quotas and trade barriers are temporary in nature and make strategic planning difficult.
quotas and trade barriers are temporary in nature and make strategic planning difficult
______________ has (have) two basic elements: helping the country's domestic firms to gain first mover gains and helping domestic firms find entry into a market. A.The Helms-Burton Act B.Free trade policy C.Economies of scale D.Strategic trade policy
strategic trade policy
Although the WTO and the GATT have made great strides in reducing tariff rates on nonagricultural products, A.tariffs on industrial goods are higher than on services. B.the WTO would like to increase the selective use of high tariffs as long as the use is truly selective. C.the WTO would like to bring down tariff rates on imports of nonagricultural goods into developing nations. D.the ultimate goals is to stabilize the tariff rates at about 4 percent.
the WTO would like to bring down tariffs rates on imports of nonagricultural goods into developing nations
