Question 1

Infant-industry protection requires some segment of the economy to incur the higher costs when local production is inefficient.

Accepted Answer

A) True 
 B)False

Question 2

The U.S. catfish industry successfully petitioned the U.S. government to require that catfish varieties imported from Vietnam be labeled as tra,basa,or pangasius. This is an example of which of the following?

Accepted Answer

A)   an embargo
B)   a tariff
C)   a nontariff barrier
D)   a direct price influenceE) A) and B)
F) All of the above

Question 3

When customs officials set a value on which to place an import tariff,they ordinarily use the declared invoice price unless they doubt its authenticity.

Accepted Answer

A) True 
 B)False

Question 4

People who argue for lifting the U.S. trade embargo with Cuba claim all of the following EXCEPT which one?

Accepted Answer

A)   The embargo has not achieved its purpose of changing Cuba's economic and political system
B)   U.S. companies lose Cuban sales to competitors from other countries.
C)   Increased exposure to the United States would be a more effective force of change.
D)   Cuba has largely become a market economy already.E) B) and D)
F) B) and C)

Question 5

Defense arguments are sometimes used to prevent exports to unfriendly countries. This runs the risk of the targeted country ________.

Accepted Answer

A)   becoming politically destabilized
B)   removing import restrictions
C)   finding alternative sources of supply
D)   banding with other countries to form a cartelE) All of the above
F) A) and B)

Question 6

Explain the rationale for and problems with making the infant-industry argument work as intended.

Accepted Answer

The infant-industry argument holds that ...

Question 7

Companies with ________ would most likely oppose global protectionist measures.

Accepted Answer

A)   internationally integrated supply chains
B)   domestically focused supply chains
C)   multidomestic production facilities
D)   product differentiationE) A) and D)
F) All of the above

Question 8

All of the following are reasons a country might institute import restrictions to improve its balance of trade position with other countries EXCEPT to ________.

Accepted Answer

A)   maintain essential industries
B)   reduce imports and encourage exports
C)   get comparable access for its companies
D)   bargain away restrictions by other countriesE) All of the above
F) B) and C)

Question 9

Assume a government places restrictions on a specific product from a specific foreign country. What would be the government's most likely concern about the foreign country's response?

Accepted Answer

A)   the foreign producers raising the prices of their exports
B)   the foreign country restricting its own imports
C)   the foreign country restricting its exports in that industry
D)   the foreign producers seeking other marketsE) B) and C)
F) A) and D)

Question 10

There are several reasons for a company to sell products abroad at either below cost or below the price in the home country. Which of the following is one of these reasons?

Accepted Answer

A)   encouraging foreign consumers to try new products
B)   improving the exporting country's terms of trade
C)   gaining imports that are sold below cost
D)   following import substitution objectivesE) B) and D)
F) C) and D)

Question 11

The relationship between import substitution policies and export-led development policies is best characterized by which of the following?

Accepted Answer

A)   Import-substitution policies are more likely to lead to production of mature products, whereas export-led development policies result in production of growth products.
B)   The two are hard to distinguish because production under import substitution may eventually be exported.
C)   Production under import substitution policies, as opposed to export-led development policies, is more likely to be located in urban areas.
D)   Production under import substitution policies, as opposed to export-led development policies, is likely to be more labor-intensive.E) A) and C)
F) C) and D)

Question 12

Exporting below cost or below the home country price is called ________.

Accepted Answer

A)   countertrade
B)   an export-led development policy
C)   a strategic trade policy
D)   dumpingE) None of the above
F) A) and B)

Question 13

An import tariff may be protective ________.

Accepted Answer

A)   only if it is on imports the country produces domestically
B)   if it serves primarily to restrict entry of hazardous materials
C)   if it does not generate significant tax revenue for essential industries
D)   even though the importing country does not produce the productE) None of the above
F) All of the above

Question 14

Why should managers have an understanding of trade protectionism?

Accepted Answer

A)   Trade protectionism targets factor endowments, thus affecting the best country to locate production.
B)   Trade protectionism affects a company's ability to sell abroad and ability to compete at home.
C)   Trade protectionism affects the number of people permitted to practice a specific profession.
D)   Trade protectionism prevents companies' enactment of merger and acquisition agreements.E) B) and C)
F) C) and D)

Question 15

All of the following are generally true about trade-displaced workers EXCEPT which one?

Accepted Answer

A)   They move abroad to take new jobs.
B)   They earn less in their new jobs than they earned in their old ones.
C)   They spend their unemployment benefits on living rather than retraining.
D)   They have difficulty finding new work because of educational deficiencies.E) All of the above
F) C) and D)

Question 16

The essential-industry argument holds that industries with potential export capabilities should be protected.

Accepted Answer

A) True 
 B)False

Question 17

What are common reasons that governments enact export restrictions? What are the possible negative consequences of such restrictions?

Accepted Answer

A country may limit exports of a product...

Question 18

Why are offsets considered protectionist measures?

Accepted Answer

A)   Exporters must often find markets for goods outside their lines of expertise.
B)   Exports must be sold at a certain percentage price below the price of domestic producers.
C)   Companies must submit samples to government authorities before receiving export permission.
D)   Trading companies must incur additional inventory carrying charges and pay significantly higher tariffs.E) B) and D)
F) A) and B)

Question 19

Export prices of primary products fluctuate less than export prices of manufactured products.

Accepted Answer

A) True 
 B)False

Question 20

Helping a struggling domestic company through import restrictions frequently causes other countries to retaliate.

Accepted Answer

A) True 
 B)False

Exam 7: Governmental Influence on Trade

Defense arguments are sometimes used to prevent exports to unfriendly countries. This runs the risk of the targeted country ________.

Correct AnswerverifiedShow Answer

All of the following are reasons a country might institute import restrictions to improve its balance of trade position with other countries EXCEPT to ________.

Correct AnswerverifiedShow Answer

The relationship between import substitution policies and export-led development policies is best characterized by which of the following?

Correct AnswerverifiedShow Answer

Why should managers have an understanding of trade protectionism?

Correct AnswerverifiedShow Answer

All of the following are generally true about trade-displaced workers EXCEPT which one?

Correct AnswerverifiedShow Answer

The essential-industry argument holds that industries with potential export capabilities should be protected.

Correct AnswerverifiedShow Answer

There are several reasons for a company to sell products abroad at either below cost or below the price in the home country. Which of the following is one of these reasons?

Correct AnswerverifiedShow Answer

What are common reasons that governments enact export restrictions? What are the possible negative consequences of such restrictions?

Correct AnswerverifiedA country may limit exports of a product...View AnswerShow Answer

When customs officials set a value on which to place an import tariff,they ordinarily use the declared invoice price unless they doubt its authenticity.

Correct AnswerverifiedShow Answer

Export prices of primary products fluctuate less than export prices of manufactured products.

Correct AnswerverifiedShow Answer

Helping a struggling domestic company through import restrictions frequently causes other countries to retaliate.

Correct AnswerverifiedShow Answer

Explain the rationale for and problems with making the infant-industry argument work as intended.

Correct AnswerverifiedThe infant-industry argument holds that ...View AnswerShow Answer

Why are offsets considered protectionist measures?

Correct AnswerverifiedShow Answer

Companies with ________ would most likely oppose global protectionist measures.

Correct AnswerverifiedShow Answer

An import tariff may be protective ________.

Correct AnswerverifiedShow Answer

The U.S. catfish industry successfully petitioned the U.S. government to require that catfish varieties imported from Vietnam be labeled as tra,basa,or pangasius. This is an example of which of the following?

Correct AnswerverifiedShow Answer

Assume a government places restrictions on a specific product from a specific foreign country. What would be the government's most likely concern about the foreign country's response?

Correct AnswerverifiedShow Answer

Infant-industry protection requires some segment of the economy to incur the higher costs when local production is inefficient.

Correct AnswerverifiedShow Answer

People who argue for lifting the U.S. trade embargo with Cuba claim all of the following EXCEPT which one?

Correct AnswerverifiedShow Answer

Exporting below cost or below the home country price is called ________.

Correct AnswerverifiedShow Answer

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A country may limit exports of a product...
View Answer

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The infant-industry argument holds that ...
View Answer

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