MGT 302 CH 8 Questions
Tariff rates on agricultural products tend to be ____ tariff rates on a manufactured good.
higher than
What industry tends to benefit the most from subsidies in most countries?
agriculture
Goods that are taxed as they ship out of a country have a(n) ____ tariff.
export
When the government does not use quotas, taxes or other means to restrict what its citizens can buy from or sell to another country, it is called _____trade.
free
A tariff is a tax levied on _____.
imports or exports
When governments intervene in foreign trade, they often claim they are protecting ______ from unfair foreign competition.
industries
The economic success of _____ put a strain on the world trading system in the 1980s and promoted protectionism measures.
Japan
Which country is pointed to as the master of administrative trade policies?
Japan
Which country was the first to officially follow a policy of free trade in the mid 1800s?
Great Britain
______ constrain a firm's ability to export its products by raising the price of the exported product, which could put the firm at a competitive disadvantage with domestic firms in that country.
Tariff barriers
Which round of GATT negotiations provided enhanced protection for intellectual property and significantly reduced barriers on trade in textiles?
The Uruguay Round
What are two ways trade barriers hamper a firm's productive activities?
They raise the cost of exporting products. Quotas limit the ability to serve a country from outside locales.
Tariff rates on ______ products are generally much higher than tariffs on manufactured products or services.
agricultural
What are two events that pose a threat to the world trading system?
Election of Donald Trump Britain's withdrawal from the European Union
Which economist was a key figure in the early free trade movement in Great Britain?
Ricardo
The text states that Donald Trump's _____ views threaten the idea of a world trading system.
mercantilism
Rising pressures for _____ lead to ongoing GATT negotiations via the Uruguay Round.
protectionism
Krugman promoted the idea that if each country seeks to follow a strategic trade policy to protect its interests, this may lead to ______.
trade war
As the text notes, unrestricted free trade is impossible if there is a lack of ____ between nations.
trust
At the end of the fiscal year, Jack's company sells their bicycles in Thailand at below what it costs to produce the bikes in order to unload excess inventory. This is an example of _____.
dumping
When manufacturers export a product to another country at a price either below the price charged in its home market or below its cost of production, as a way to get rid of excess product, it is called ______.
dumping
One way the GATT hoped to achieve its objective was by _____.
eliminating tariffs
What can a country use to counter-act a country that uses subsidies to support an industry?
establish anti-dumping regulations
The strategic trade policy may look good in theory, but in practice it may be unworkable. As a result, the case for ___ trade may come to the forefront.
free
During th 1980s, the trend was for ______ protectionism around the world.
greater
A(n) _____ is a type of trade restriction that sets a physical limit on the quantity of a product that can be imported into the country in a set period of time.
import quota
The oldest argument for government intervention in trade where developing nations must protect their domestic industries until they are ready to compete globally is the ______ argument.
infant industry
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
Evan works in a country in which the government has stated that 45% of all goods must be produced domestically. What type of requirement does this country have in place?
local content requirement
In order to win a contract from Mexico, QVB Autos Manufacturing must make 65% of the component parts of their autos in Mexico. This is an example of a
local content requirement
As a result of the Doha Round, _____ countries are entering into multilateral and bilateral trade agreements.
more
In response to the apparent failure of the current Doha Round, many nations have implemented _____.
multilateral trade agreements
What is considered the most common political argument for government intervention in foreign trade?
protecting jobs and industries
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
What are three main instruments of trade policy?
subsidies voluntary export restraints import quotas
Taxes placed on imports to protect domestic producers from foreign competition and to produce revenue for the government are
tariffs
Which instrument of trade policy has been in use the longest?
tariffs
The main objective of GATT was to liberalize _____ restrictions.
trade
When considering the benefit of free trade in neighboring countries, one government might favor lowering trade barriers but won't do it because of a lack of ______ in the other nation.
trust
During the 1970s, Congress did not allow US industries to export crude oil production. This action is an example of an export _____.
ban
Subsidies are a form of payment that is provided by _____.
the government
True or false: Governments do not always act in the national interest when intervening in the economy.
True Reason: Many times governments are influenced by politically important interest groups.
Governments implement _____ trade policies that are designed to make it difficult for imports to enter a country.
administrative
Strategic trade policy suggests a(n) ______ justification for government intervention in trade.
economic
The WTO is more successful than GATT because the WTO has ______ mechanisms that make it more effective.
enforcement
The infant industry argument for trade intervention states that developing countries need to support new industries until they are strong enough to _____.
compete globally
