International Economics 14th Edition by Robert Carbaugh – Test Bank

International Economics 14th Edition by Robert Carbaugh – Test Bank

CHAPTER 6—TRADE REGULATIONS AND INDUSTRIAL POLICIES

MULTIPLE CHOICE

1. The World Trade Organization was established by the ____ of multilateral trade negotiations:
a. Kennedy Round
b. Tokyo Round
c. Uruguay Round
d. Clinton Round

ANS: C PTS: 1 DIF: Easy
NAT: BPROG: Reflective Thinking TOP: World Trade Organization
KEY: BLOOM’S: Knowledge

2. Under U.S. commercial policy, the escape clause results in:
a. Temporary quotas granted to firms injured by import competition
b. Tariffs that offset export subsidies granted to foreign producers
c. Tax advantages extended to minority-owned exporting firms
d. Duties which offset commercial dumping on the part of foreign firms

ANS: A PTS: 1 DIF: Easy
NAT: BPROG: Reflective Thinking
TOP: Safeguards (The Escape Clause): Emerg. Prot. for I KEY: BLOOM’S: Knowledge

3. Adjustment assistance is sometimes used to assist:
a. In retraining workers displaced by imports
b. In retraining workers displaced by exports
c. Foreign firms injured by our quotas
d. Foreign firms injured by our tariffs

ANS: A PTS: 1 DIF: Easy
NAT: BPROG: Reflective Thinking
TOP: Safeguards (The Escape Clause): Emerg. Prot. for I KEY: BLOOM’S: Knowledge

4. The Export-Import Bank of the United States encourages American firms to sell overseas by providing direct loans and loan guarantees to foreign purchasers of American goods. To American firms, this represents a:
a. Specific subsidy
b. Ad valorem subsidy
c. Domestic subsidy
d. Export subsidy

ANS: D PTS: 1 DIF: Moderate
NAT: BPROG: Reflective Thinking TOP: Industrial Policy of the US
KEY: BLOOM’S: Comprehension

5. The Smoot-Hawley Tariff Act of 1930 has generally been associated with:
a. Falling tariffs
b. Increases in the volume of trade
c. Intensifying the worldwide depression
d. Efforts to liberalize nontariff trade barriers

ANS: C PTS: 1 DIF: Moderate
NAT: BPROG: Reflective Thinking TOP: US Tariff Policies Before 1930
KEY: BLOOM’S: Comprehension

6. A trade policy designed to alleviate some domestic economic problem by exporting it to foreign countries is known as a (an):
a. International dumping policy
b. Trade adjustment assistance policy
c. Most-favored-nation policy
d. Beggar-thy-neighbor policy

ANS: D PTS: 1 DIF: Moderate
NAT: BPROG: Reflective Thinking TOP: Industrial Policy of the US
KEY: BLOOM’S: Knowledge

7. Under U.S. commercial policy, which clause permits the modification of a trade liberalization agreement on a temporary basis if serious injury occurs to domestic producers as a result of the agreement?
a. Adjustment assistance clause
b. Escape clause
c. Most-favored-nation clause
d. Reciprocal-trade clause

ANS: B PTS: 1 DIF: Moderate
NAT: BPROG: Reflective Thinking TOP: Industrial Policy of the US
KEY: BLOOM’S: Knowledge

8. Which policy reflects the notion that if society enjoys gains due to increased efficiency stemming from trade liberalization, some sort of compensation should be provided to those who are temporarily hurt by import competition?
a. Countervailing duties
b. Trade adjustment assistance
c. Domestic subsidies
d. Most-favored-nation standard

ANS: B PTS: 1 DIF: Moderate
NAT: BPROG: Reflective Thinking TOP: Trade Adjustment Assistance
KEY: BLOOM’S: Knowledge

9. The Uruguay Round of Multilateral Trade Negotiations accomplished all of the following except:
a. Placed primary emphasis on nontariff trade barriers
b. Is estimated to yield modest gains in world output and employment
c. Achieved cuts in tariffs but not in nontariff trade barriers
d. Abolished all barriers to trade in agricultural products

ANS: C PTS: 1 DIF: Moderate
NAT: BPROG: Reflective Thinking TOP: General Agreement on Tariffs and Trade
KEY: BLOOM’S: Knowledge

10. The General Agreement on Tariffs and Trade and its successor, the World Trade Organization, have resulted in:
a. Termination of export subsidies applied to manufactured goods
b. Termination of import tariffs applied to manufactured goods
c. Encouragement of beggar-thy-neighbor policies
d. Reductions in trade barriers via multilateral negotiations

ANS: D PTS: 1 DIF: Moderate
NAT: BPROG: Reflective Thinking TOP: General Agreement on Tariffs and Trade
KEY: BLOOM’S: Knowledge