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 […]
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
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
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 […]
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
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
QUESTION In the Uruguay Round of the WTO, member countries sought to exempt trade in services from GATT rules. Indicate whether the statement is true or false. ANSWER FALSE Against the background of rising pressures for protectionism, in 1986 GATT members embarked on their eighth round of negotiations to reduce tariffs, the Uruguay Round. […]
QUESTION The Palladian government required that all imported products that came from Lovaskiya be checked by Palladian customs inspectors. The inspection was done at a container freight station that was both remote and poorly staffed. This delayed the Lovaskiyan consignment from reaching the consumers in Palladia. The inspection strategy adopted by the customs officers in […]
QUESTION Governments can protect consumers from unsafe products by issuing a limit or a ban on such products. Indicate whether the statement is true or false. ANSWER TRUE Many governments have long had regulations to protect consumers from unsafe products. The indirect effect of such regulations often is to limit or ban the importation […]
QUESTION Some countries argue that government intervention to protect certain domestic industries can compromise national security. Indicate whether the statement is true or false. ANSWER FALSE Countries sometimes argue that it is necessary to protect certain industries because they are important for national security.
