QUESTION A government should use subsidies to support promising firms that are active in newly emerging industries, according to: A. strategic trade policy. B. public policy. C. absolute advantage. D. product life-cycle. E. industrialization. ANSWER A
Date: September 3rd, 2020
QUESTION According to Paul Krugman, a country that attempts to use strategic trade policy to establish a domestic firm in a dominant position in a global industry, is most likely to: A. dominate the industry. B. move away from protectionism. C. provoke retaliation. D. incur huge financial debts. E. upset the special-interest groups within the […]
Date: September 3rd, 2020
QUESTION The economically damaging effects of the Great Depression were worsened in 1929 by the: A. First World War. B. U.S. stock market collapse. C. spread of communism through Europe. D. Cold War between the world’s superpowers. E. harvest failure in Great Britain and famine in Ireland. ANSWER B
Date: September 3rd, 2020
QUESTION Which of the following is an argument against embracing strategic trade policy? A. It hampers the chances of a country’s firms to effectively exploit the first-mover advantages. B. It is certain to be captured by special-interest groups within the economy, which will distort it to their own ends. C. It increases the prices of […]
Date: September 3rd, 2020
QUESTION Which of the following best explains the reason for the rise in protectionist pressures around the world during the 1980s? A. The strict GATT bureaucracy in Geneva controlling trade regulations B. The opening up of international markets to cheap products from China C. The fall of the Soviet Union D. The persistent trade deficit […]
Date: September 3rd, 2020
QUESTION Bilateral voluntary export restraints, or VERs, circumvented GATT agreements, because: A. these nations withdrew their membership to the GATT. B. the member nations had ceased to recognize GATT as a regulatory body for international trade. C. VERs were not a recognized trade barrier under the GATT constitution. D. neither the importing country nor the […]
Date: September 3rd, 2020
QUESTION Which of the following best indicates the motive for foreign firms to engage in dumping? A. Unloading excess production in foreign markets B. Cutting labor costs to reduce the costs of production C. Providing a wider range of products for consumers in foreign markets D. Meeting the voluntary export requirements imposed on it E. […]
Date: September 3rd, 2020
QUESTION One of the reasons why protectionist pressures arose around the world during the 1980s was: A. the different ways many countries found to get around GATT regulations. B. the opening up of national markets to cheap products from China. C. the fall of the Soviet Union. D. the persistent trade lead taken by the […]
Date: September 3rd, 2020
QUESTION Government intervention can be self-defeating because it tends to protect the inefficient rather than help firms become efficient global competitors. Indicate whether the statement is true or false. ANSWER TRUE Government intervention can be self-defeating because it tends to protect the inefficient rather than help firms become efficient global competitors. Intervention is dangerous; […]
Date: September 3rd, 2020
QUESTION A firm may set up production activities in a foreign country, where trade barriers do not currently exist, to reduce the threat of trade barriers being imposed later. Indicate whether the statement is true or false. ANSWER TRUE Even when trade barriers do not exist, the firm may still want to locate some […]
Date: September 3rd, 2020
