Deck 8: Global Trade

Question 1

There are no longer any governments that put up barriers to free trade.

Answer 1

False

Question 2

The support of government subsidies of private industry is elaborated in which theory?

A) Free trade theory
B) Strategic trade theory
C) Subsidual theory
D) Fair trade theory

Answer 2

B

Question 3

The trade deficit is the difference between the value of goods and services that a country buys from overseas and the value of goods and services it sells to other countries.

Answer 3

True

Question 4

The Doha Agreement

A) reflected the great power of Western states.
B) demonstrated the growing power of developing nations.
C) replaced the GATT with the WTO.
D) added agriculture to the global trade framework.

Question 5

The Reciprocal Trade Agreement Act authorized the president to negotiate trade routes with other countries.

Question 6

The Maastricht Treaty established the

A) limits of Germany's economy following WWI.
B) barriers on creating free trade areas in Europe.
C) European monetary system.
D) European Union.

Question 7

The International Monetary Fund (IMF)was created in order to

A) supplement private capital for international investment.
B) manage exchange rates and payment imbalances between nations.
C) promote free trade and to reduce tariffs.
D) enforce limits on products that each country could produce.

Question 8

The control that people and corporations have over artistic, creative, scientific, industrial, and educational inventions is known as

A) intellectual property rights.
B) patents.
C) intellectual control.
D) intellectual property control.

Question 9

The stressed role of government in trade is found in

A) the reciprocal model.
B) autarky.
C) the state-centric model.
D) the mercantilist model.

Question 10

The mercantilist model of trade stressed the role of government in trade and emphasized the importance of balance-of-payment surpluses in trade with other countries.

Question 11

The manufacturing system that stressed mass production of standardized products is known as

A) Fordism.
B) McLeanism.
C) capitalism.
D) standardism.

Question 12

The theory that states that each country should specialize in producing specific products that will improve its trade with other states is known as __________ advantage.

A) complete
B) mercantilist
C) comparative
D) competitive

Question 13

Which of the following is NOT an example of trade protectionism?

A) Smoot-Hawley Tariff Act
B) Corn Laws
C) Navigation Acts
D) Reciprocal Trade Agreement Act

Question 14

Which of the following was NOT a premise of the General Agreement of Tariffs and Trade (GATT)?

A) Bilateral negotiations are preferable to multilateral negotiations.
B) Free trade benefits global society.
C) Governments should minimize their involvement in the market.
D) Private economic actors are preferable to governments for conducting and managing international trade.

Question 15

The 2008-2009 global financial crisis and economic recession strengthened labor unions.

Question 16

A _____________ occurs when the value of imported goods and services is less than the value of exported goods and services.

A) trade deficit
B) trade surplus
C) market deficit
D) market surplus

Question 17

Which of the following is NOT a reason behind the decline of trade unions?

A) Globalization of individualism
B) Public perceptions of unions
C) Growth in the power of the manufacturing economy
D) Political change

Question 18

An arrangement under which countries prevent their currencies from rising against the dollar is called

A) the Doha Agreement.
B) Bretton Woods 2.
C) the Uruguay Round.
D) Most-Favored Nation Clause.

Question 19

The _____________ is the amount at which one country's currency can be bought by another country's currency.

A) reciprocal rate
B) currency exchange
C) exchange rate
D) currency rate

Question 20

The never-ending search for lower production costs is known as

A) mercantilism.
B) capitalism.
C) the race to the bottom.
D) strategic trade theory.

Question 21

The shift toward production of goods and services based on cost considerations, arbitrary specialization, and government and corporate policies is known as ___________________.

Question 22

What are intellectual property rights? Do intellectual property rights potentially violate principles of free trade? Please explain.

Question 23

What are the premises and principles of GATT addressed in this chapter? Discuss the major trade disputes. Give examples.

Question 24

The __________________ was created to supplement private capital for international investment, originally with the intent of reconstructing Europe.

Question 25

The_______________ stressed the role of government in trade and emphasized the importance of balance-of-payment surpluses in trade with other countries.

Question 26

Do you think that globalization contributes to improving living standards around the world? Why or why not? Give examples.

Question 27

The ______________________is the difference between the value of goods and services that a country buys from overseas and the value of goods and services it sells to other countries.

Question 28

What exactly is the mercantilist model? Give examples.

Question 29

The public perception of unions is that they are not responsible for economic problems, and this has contributed to their growth.

Question 30

The control people have over their artistic, creative, scientific, industrial, and educational inventions are called ____________________.

Question 31

The ___________________ for a currency is how much of one country's money can be bought with a specified amount of another country's currency.

Question 32

Large young populations in developing countries reinforce economic growth by providing relatively inexpensive labor.

Question 33

The __________________________ manages exchange rates and payment imbalances among nations.

Question 34

As early as the third century B.C., various nomadic groups and Chinese merchants established a trading route, known as the _____________________.

Question 35

The relentless search by transnational companies for lower production costs in politically stable countries has led to what is known as a race to the bottom.

Question 36

Free-Trade Areas are characterized by the removal of ________________ among members.

Question 37

Tariffs are used for both economic and political reasons.

Question 38

NAFTA stands for North American Fair Tariffs Association.

Question 39

The __________________________ established the European Monetary System to stabilize monetary affairs in Western Europe.

Question 40

What factors discussed in this chapter have helped environmental issues become a concern in global trade?