QUESTION Dumping is variously defined as selling goods in a foreign market at below their costs of production, or as selling goods in a foreign market at below their “fair” market value. Indicate whether the statement is true or false. ANSWER TRUE Dumping is defined as selling goods in a foreign market at below […]
Date: September 3rd, 2020
QUESTION Paul Krugman asserts that a strategic trade policy is almost certain to be captured by special-interest groups within the economy, who will distort it to their own needs. Indicate whether the statement is true or false. ANSWER TRUE A further reason for not embracing strategic trade policy, according to Krugman, is that such […]
Date: September 3rd, 2020
QUESTION Both import quotas and voluntary export restraints (VERs) benefit domestic producers by limiting import competition. Indicate whether the statement is true or false. ANSWER TRUE As with tariffs and subsidies, both import quotas and VERs benefit domestic producers by limiting import competition.
Date: September 3rd, 2020
QUESTION The Buy America Act specifies that government agencies must give preference to American products when putting contracts for equipment out for bid unless the foreign products have a significant advantage. Indicate whether the statement is true or false. ANSWER TRUE A little-known law in the United States, the Buy America Act, specifies that […]
Date: September 3rd, 2020
QUESTION According to Paul Krugman, a country that adopts a strategic trade policy aimed at establishing domestic firms in a dominant position in a global industry will probably provoke retaliation. Indicate whether the statement is true or false. ANSWER TRUE Krugman argues that a strategic trade policy aimed at establishing domestic firms in a […]
Date: September 3rd, 2020
QUESTION The strategic trade policy arguments of the new trade theorists suggest an economic justification for government intervention in international trade and this justification challenges the rationale for unrestricted free trade. Indicate whether the statement is true or false. ANSWER TRUE The strategic trade policy arguments of the new trade theorists suggest an economic […]
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
QUESTION In recent decades, a fall in subsidies, quotas, and voluntary export restraints has been accompanied by a rise in tariff barriers. Indicate whether the statement is true or false. ANSWER FALSE A fall in tariff barriers in recent decades has been accompanied by a rise in nontariff barriers, such as subsidies, quotas, voluntary […]
Date: September 3rd, 2020
QUESTION Free trade as a government policy was first officially embraced by Germany in 1846, when the Bundestag repealed the Corn Laws. Indicate whether the statement is true or false. ANSWER FALSE Free trade as a government policy was first officially embraced by Great Britain in 1846, when the British Parliament repealed the Corn […]
Date: September 3rd, 2020
