Global Business Today Study Set 7

Business

Quiz 7 :
Government Policy and International Trade

Quiz 7 :
Government Policy and International Trade

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An ad valorem tariff is levied as a fixed charge for each unit of an imported good.
Free
True False
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Answer:

False

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Import tariffs protect domestic producers against foreign competitors.
Free
True False
Answer:

Answer:

True

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Export tariffs are not as common as import tariffs.
Free
True False
Answer:

Answer:

True

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When the government provides a low-interest loan to a failing industry to bolster business, it is an example of a subsidy.
True False
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In most countries, the retail industry tends to be one of the largest recipients of subsidies.
True False
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Quota rent refers to the extra profit that producers make when supply is artificially limited by an import quota.
True False
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The purpose of an export tariff is to encourage exporting and guarantee the sufficient supply of a good within a country.
True False
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Dumping occurs when companies sell goods in a foreign market at below their costs of production.
True False
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Governments can protect consumers from unsafe products by issuing a limit or a ban on such products.
True False
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One of the more frequent political arguments for government intervention states that it is necessary to protect industries from foreign competition.
True False
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The Trump Administration justified tariffs on foreign steel imports in 2018 by saying it was a national security issue.
True False
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The infant industry argument is the oldest economic argument that promotes government intervention.
True False
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Alexander Hamilton promoted the idea that government should support a new industry with government intervention tactics until the industry is strong enough to face international competition.
True False
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Paul Krugman argues that although strategic trade policy looks unappealing in theory, in practice it is most likely to be workable.
True False
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Krugman's main concern with a strategic trade policy is the growth of monopolies within the marketplace.
True False
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The Smoot-Hawley Act aimed to liberalize trade by eliminating tariffs, subsidies, and import quotas.
True False
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After the Great Depression, there was a favorable shift in the U.S. government toward free trade.
True False
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One of the reasons for the trend toward greater protectionism during the 1980s and 1990s was that many countries found ways to get around GATT regulations.
True False
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In the Uruguay Round of the WTO, member countries sought to exempt trade in services from GATT rules.
True False
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The World Trade Organization's TRIPS agreement focuses on extending free trade agreements to services.
True False
Answer:
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