Question 1

According to most economists, outsourcing service jobs:

Accepted Answer

A)  helps both countries in the long run.
B)  hurts both countries because the United States loses jobs and the employees of the call center are exploited with low wages.
C)  helps the United States but hurts the country with the low-cost labor.
D)  helps the country getting the jobs but hurts the United States with the loss of jobs.

Question 2

Threats to put tariffs on a nation in an attempt to get that nation to reduce its restrictions on trade are called:

Accepted Answer

A)  strategic trade policies.
B)  trade adjustment assistance programs.
C)  learning by doing.
D)  inertia and cachet.

Question 3

What are the six main methods used by governments to restrict trade?

Accepted Answer

Governments have six main cate...

Question 4

A country imposing trade restrictions can benefit only if other countries also impose trade restrictions.

Accepted Answer

A) True 
 B)False

Question 5

The percentage of goods and services the United States has imported from China and India over the last 15 years:

Accepted Answer

A)  has remained roughly the same.
B)  has risen.
C)  has fallen.
D)  initially rose and then dropped back to the original level.

Question 6

In strategic trade bargaining it is sometimes reasonable to be unreasonable.

Accepted Answer

A) True 
 B)False

Question 7

What does it mean for a country to be a debtor nation? What has to happen for a country to change from a debtor nation to a creditor nation?

Accepted Answer

A country is considered a debtor nation ...

Question 8

The voluntary export restraints on autos by Japan in the early 1980s were:

Accepted Answer

A)  prohibited under the GATT treaty.
B)  unlike an import quota and did not affect the quantity of cars imported.
C)  unlike a tariff and did not affect the price of imports.
D)  probably approved of by the Japanese car companies since it increased their profits.

Question 9

Transshipments, which are used commonly in international trade, tend to:

Accepted Answer

A)  undermine the effectiveness of a sanction.
B)  strengthen the national security argument for trade restrictions.
C)  increase the effectiveness of trade restrictions.
D)  reduce the volume of world trade.

Question 10

A voluntary restraint agreement:

Accepted Answer

A)  is prohibited under the GATT treaty and has become less common recently.
B)  does not, unlike a quota, affect the quantity of imports.
C)  does not, unlike a tariff, affect the price of imports.
D)  raises the price of imports in the same way as a quota.

Question 11

What is the major reason why developing countries often impose tariffs on imports rather than quotas?

Accepted Answer

Developing countries...

Question 12

Technological changes in telecommunications have:

Accepted Answer

A)  reduced the importance of services in the world economy.
B)  allowed increased foreign trade in many services.
C)  reduced the need for foreign trade in many services.
D)  profoundly affected trade in manufactured goods with little effect on trade in services.

Question 13

The text suggests that if economists had a mantra, it would be:

Accepted Answer

A)  do unto others before they do unto you.
B)  justice is the measure of all things.
C)  when one person benefits, another is hurt.
D)  trade is good.

Question 14

Refer to the graph shown for a small country that is a price taker internationally.  Assume the foreign supply of this product is perfectly elastic at a price of $4 per unit. If there are no trade restrictions, this country will produce:

Accepted Answer

A)  2,400 units domestically and import 5,000 units.
B)  7,400 units domestically and export 5,000 units.
C)  4,800 units domestically and consume 4,800 units.
D)  4,800 units domestically and import 2,600 units.

Question 15

One impact of an import quota is to:

Accepted Answer

A)  decrease the price of the imported good for the consumer.
B)  increase the price of the domestic good for the consumer.
C)  redistribute income from domestic producers to domestic consumers.
D)  decrease the price received by foreign producers.

Question 16

Analysts have suggested that the cost of bras is related to trade restrictions on textile imports. What does the price of bras have to do with tariffs and quotas?

Accepted Answer

A)  Trade restrictions protect consumers by keeping the price of bras low.
B)  Trade restrictions in the form of tariffs keep prices of bras high, but replacing them with quotas will result in lower prices.
C)  Trade restrictions keep the prices of bras high, and ending them will result in lower prices.
D)  Trade restrictions do not influence the price of bras; the price is determined by domestic technology and the overall inflation rate.

Question 17

Free trade associations can potentially be harmful to international trade.

Accepted Answer

A) True 
 B)False

Question 18

Countries restrict international trade for all of the following reasons except:

Accepted Answer

A)  international trade probably will lead to the displacement of workers.
B)  the benefits of trade usually are limited to small groups, whereas the costs are widely scattered across the population.
C)  it is sometimes difficult to decide where a country's comparative advantage lies when "learning by doing" effects are important.
D)  economies of scale can mean that a country is able to develop a comparative advantage by protecting infant industries.

Question 19

Import duties ranging from 28 percent to 113 percent on Chinese frozen and canned shrimp are an example of a policy that:

Accepted Answer

A)  protects domestic fisheries from overfishing.
B)  uses regulations and taxes to protect domestic consumers.
C)  protects domestic producers from foreign producers.
D)  protects domestic consumers from foreign producers.

Question 20

Refer to the graph shown for a small country that is a price taker internationally.  Assume the foreign supply of this product is perfectly elastic at a price of $4 per unit. Starting from a free trade equilibrium, a tariff in the amount of $2 per unit would be expected to cause domestic production to:

Accepted Answer

A)  increase from 2,400 to 7,400.
B)  increase from 2,400 to 3,600.
C)  decrease from 4,800 to 3,600.
D)  decrease from 7,400 to 6,100.

Exam 10: International Trade Policy

One impact of an import quota is to:

Correct Answer
verified

What are the six main methods used by governments to restrict trade?

Correct Answer
verified
Governments have six main cate...
View Answer

What does it mean for a country to be a debtor nation? What has to happen for a country to change from a debtor nation to a creditor nation?

Correct Answer
verified
A country is considered a debtor nation ...
View Answer

The voluntary export restraints on autos by Japan in the early 1980s were:

Correct Answer
verified

In strategic trade bargaining it is sometimes reasonable to be unreasonable.

Correct Answer
verified

Free trade associations can potentially be harmful to international trade.

Correct Answer
verified

Analysts have suggested that the cost of bras is related to trade restrictions on textile imports. What does the price of bras have to do with tariffs and quotas?

Correct Answer
verified

A voluntary restraint agreement:

Correct Answer
verified

Refer to the graph shown for a small country that is a price taker internationally. Assume the foreign supply of this product is perfectly elastic at a price of $4 per unit. If there are no trade restrictions, this country will produce:

Correct Answer
verified

According to most economists, outsourcing service jobs:

Correct Answer
verified

A country imposing trade restrictions can benefit only if other countries also impose trade restrictions.

Correct Answer
verified

Import duties ranging from 28 percent to 113 percent on Chinese frozen and canned shrimp are an example of a policy that:

Correct Answer
verified

Transshipments, which are used commonly in international trade, tend to:

Correct Answer
verified

The percentage of goods and services the United States has imported from China and India over the last 15 years:

Correct Answer
verified

What is the major reason why developing countries often impose tariffs on imports rather than quotas?

Correct Answer
verified
Developing countries...
View Answer

Technological changes in telecommunications have:

Correct Answer
verified

Countries restrict international trade for all of the following reasons except:

Correct Answer
verified

The text suggests that if economists had a mantra, it would be:

Correct Answer
verified

Threats to put tariffs on a nation in an attempt to get that nation to reduce its restrictions on trade are called:

Correct Answer
verified

Correct Answer
verified

Exam 10: International Trade Policy

One impact of an import quota is to:

Correct AnswerverifiedShow Answer

What are the six main methods used by governments to restrict trade?

Correct AnswerverifiedGovernments have six main cate...View AnswerShow Answer

What does it mean for a country to be a debtor nation? What has to happen for a country to change from a debtor nation to a creditor nation?

Correct AnswerverifiedA country is considered a debtor nation ...View AnswerShow Answer

The voluntary export restraints on autos by Japan in the early 1980s were:

Correct AnswerverifiedShow Answer

In strategic trade bargaining it is sometimes reasonable to be unreasonable.

Correct AnswerverifiedShow Answer

Free trade associations can potentially be harmful to international trade.

Correct AnswerverifiedShow Answer

Analysts have suggested that the cost of bras is related to trade restrictions on textile imports. What does the price of bras have to do with tariffs and quotas?

Correct AnswerverifiedShow Answer

A voluntary restraint agreement:

Correct AnswerverifiedShow Answer

Refer to the graph shown for a small country that is a price taker internationally. Assume the foreign supply of this product is perfectly elastic at a price of $4 per unit. If there are no trade restrictions, this country will produce:

Correct AnswerverifiedShow Answer

According to most economists, outsourcing service jobs:

Correct AnswerverifiedShow Answer

A country imposing trade restrictions can benefit only if other countries also impose trade restrictions.

Correct AnswerverifiedShow Answer

Import duties ranging from 28 percent to 113 percent on Chinese frozen and canned shrimp are an example of a policy that:

Correct AnswerverifiedShow Answer

Transshipments, which are used commonly in international trade, tend to:

Correct AnswerverifiedShow Answer

The percentage of goods and services the United States has imported from China and India over the last 15 years:

Correct AnswerverifiedShow Answer

What is the major reason why developing countries often impose tariffs on imports rather than quotas?

Correct AnswerverifiedDeveloping countries...View AnswerShow Answer

Technological changes in telecommunications have:

Correct AnswerverifiedShow Answer

Countries restrict international trade for all of the following reasons except:

Correct AnswerverifiedShow Answer

The text suggests that if economists had a mantra, it would be:

Correct AnswerverifiedShow Answer

Threats to put tariffs on a nation in an attempt to get that nation to reduce its restrictions on trade are called:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
Governments have six main cate...
View Answer

Correct Answer
verified
A country is considered a debtor nation ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Developing countries...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified