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
QUESTION The threat of antidumping action enhances the ability of a firm to use aggressive pricing to gain market share in a country. Indicate whether the statement is true or false. ANSWER FALSE The threat of antidumping action limits the ability of a firm to use aggressive pricing to gain market share in a […]
Date: September 3rd, 2020
QUESTION Which of the following is a trade policy instrument that the GATT and WTO have been most successful in limiting? A. Local content requirements B. Tariffs C. Subsidies D. Voluntary export restraints E. Import quotas ANSWER B
Date: September 3rd, 2020
QUESTION Which of the following refers to a quota on trade imposed by the exporting country, typically at the request of the importing country’s government? A. Tariff rate quota B. Quota rent C. Voluntary export restraint (VER) D. Quota share E. Export embargo ANSWER C
Date: September 3rd, 2020
QUESTION Animax Limited got an order to sell 50,000 central processing units (CPUs) to Palladia, but the Palladian government stipulated that 15 percent of the component parts of those CPUs must be produced in Palladia. This stipulation by the Palladian government would be example of a(n): A. voluntary export restraint. B. quota rent. C. import […]
Date: September 3rd, 2020
QUESTION The extra profit that producers make when supply is artificially limited by an import quota is referred to as a: A. net profit. B. quota rent. C. trade surplus. D. profit margin. E. quota share. ANSWER B
Date: September 3rd, 2020
QUESTION Which of the following requires that some specific fraction of a good must be produced domestically? A. International allocation requirement B. Local content requirement C. Specific quota requirement D. Ad valorem portion requirement E. Domestic sales requirement ANSWER B
Date: September 3rd, 2020
QUESTION Which of the following statements is true about voluntary export restraints (VERs)? A. VERs benefit consumers by limiting import competition. B. VERs reduce the domestic price of an imported good. C. When imports are limited to a low percentage of the market by a VER, the price is bid up for that limited foreign […]
Date: September 3rd, 2020
QUESTION Which of the following specifies that U.S. government agencies must give preference to U.S. products when putting contracts for equipment out to bid unless the foreign products have a significant price advantage? A. Export Administration Act B. Helms-Burton Act C. Hawley-Burton Act D. Buy America Act E. Volcker Rule ANSWER D
Date: September 3rd, 2020
QUESTION Which of the following are bureaucratic rules designed to make it difficult for imports to enter a country? A. Voluntary export restraints B. Consumer regulations C. Subsidies D. Administrative trade policies E. Public sector regulations ANSWER D
Date: September 3rd, 2020
