QUESTION Which of the following groups benefits the most from the imposition of tariffs? A. Domestic producers B. Consumers C. Exporters and importers D. Foreign producers E. International bodies such as WTO ANSWER A
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
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 Import tariffs protect domestic producers against foreign competitors. Indicate whether the statement is true or false. ANSWER TRUE Domestic producers gain, because the tariff affords them some protection against foreign competitors by increasing the cost of imported foreign goods.
Date: September 3rd, 2020
QUESTION Paul Krugman argues that although strategic trade policy looks unappealing in theory, in practice it is most likely to be workable. Indicate whether the statement is true or false. ANSWER FALSE In response to certain challenges to economic orthodoxy, a number of economists—including some of those responsible for the development of the new […]
Date: September 3rd, 2020
