Deck 3: Trade institutions and trade policy

Question 1

The availability of a large US domestic market and the relative distance to foreign markets resulted in US manufacturers simply not feeling a compelling need to seek business beyond national borders.

Answer 1

True

Question 2

The World Bank's official name is the International Bank for Reconstruction and Development.

Answer 2

True

Question 3

New Zealand has had a free trade agreement with China since 2008.

Answer 3

True

Question 4

The more successful the WTO is, the more it may infringe on the sovereignty of nations.

Question 5

The United States has used 'voluntary' import restraints that are applied selectively against New Zealand.

Question 6

Extreme economic poverty is defined as living on less than US$1.50 per day.

Question 7

The World Trade Organization (WTO)has its origins in the GATT.

Question 8

Exporting activities allow a firm to achieve economies of scale but actually make the firm less efficient in marketing terms.

Question 9

Australia refuses to negotiate a free trade agreement with China.

Question 10

The WTO's core mission is the facilitation of international trade and investment, while ensuring that an effective forum exists to address concerns surrounding the core.

Question 11

The International Bank for Reconstruction and Development is also known as the IMF.

Question 12

It is quite unclear whether stringent economic rules and performance measures are equally applicable to all countries seeking IMF assistance.

Question 13

The original goal of the IMF was to provide for fixed exchange rates between countries.

Question 14

The term 'born global' means that a firm has had an international commitment since its inception.

Question 15

Australia and New Zealand have experienced a significant increase in their share of world trade since 1948.

Question 16

By August 2012, the WTO had 201 member 'countries'.

Question 17

A Free Trade Agreement between the US and New Zealand is unlikely to happen.

Question 18

Successful foreign competitiveness in international trade has resulted in major trade deficits for Australia, New Zealand and the USA.

Question 19

Economic blocs integrate the economic and political activities of nations.

Question 20

World Bank was designed to provide stability for the international monetary framework

Question 21

APEC is:

A)Association of Petroleum Exporting Countries
B)Asia Pacific Economic Cooperation
C)a control agreement between Australia and the Philippines
D)Australia Pacific Economic Cooperation

Question 22

Which of the following statements is incorrect?

A)China represents a big threat to Australian companies as Australian companies are not competitive enough to expand into China.
B)New Zealand's free trade agreement with China was established in 2008.
C)Both Australia and New Zealand have seen a remarkable change in the direction of trade over the last half century.
D)The White Paper addresses the rise of Asia and Australia's response to it.

Question 23

An economic bloc is:

A)an integration of the economic and political activities of member nations.
B)a global cartel of nations enforcing economic rules among member states.
C)all of the competing nations in the same marketplace.
D)the goal of a global marketplace.

Question 24

How many countries are members of the World Trade Organisation?

A)53 countries
B)98 countries
C)159 countries
D)201 countries

Question 25

The World Bank has had its effectiveness questioned because:

A)of a lack of global interest, inadequacy of information and ignorance of where and how to market internationally.
B)it has not provided stability for the international monetary framework.
C)it has not played an important role in the stability of exchange rates.
D)All of these choices

Question 26

Which of the following is not a result of a restriction of investment?

A)A denial of access to foreign capital and often innovation
B)A tightening up of credit markets
C)Higher interest rates
D)An increased willingness to adapt to changing world market conditions

Question 27

The World Trade Organization has its origins in:

A)the COMECON agreement.
B)the GATT agreement.
C)the SAARC agreement.
D)the Maastricht Treaty.

Question 28

The classic predicament of poorer developing countries is:

A)high-tech, high-value-added products being imported.
B)high-tech, high-value-added products being exported.
C)exports begin mainly, or even exclusively, composed of processed raw materials.
D)exports begin mainly, or even exclusively, composed of unprocessed raw materials, with the high-tech, high-value-added products being imported.

Question 29

The USA can run a very large trade deficit because:

A)of its political stability.
B)of its perceived economic security.
C)it is a preferred borrower.
D)of its political stability and its perceived economic security.

Question 30

Trade deficits:

A)indicate that a country, in its international activities, is producing more than it is consuming.
B)can be reduced by decreasing exports.
C)can be reduced by increasing exports.
D)can be reduced by increasing imports.

Question 31

Which of the following has the highest trade per capita in the world?

A)China
B)Hong Kong
C)USA
D)Japan

Question 32

Which of the following is not a reason why many countries provide export promotion assistance to their firms?

A)The national need to earn foreign currency
B)To encourage domestic employment
C)To increase domestic economic activity
D)The national need to import

Question 33

Since the 1960s, US firms tended not to have an international outlook because:

A)the domestic market was large enough to ensure profits.
B)international marketing was considered risky and complicated.
C)the US had sufficient diversity of resources.
D)All of these choices

Question 34

Which of the following is not a type of trade barrier?

A)Standards, testing, labelling and certification
B)Lack of intellectual property protection
C)Investment barriers
D)Government subsidies

Question 35

Which of the following WTO is not responsible for?

A)The General Agreement on Trade in Services (GATS)
B)Agreements on trade-related aspects of intellectual property rights (TRIPS)and trade-related investment measures (TRIMS)
C)The administration of a broad variety of international trade and investment accords
D)Helping impoverished and developing nations

Question 36

Which of the following is not in the list of Australia's FTAs?

A)Thailand-Australia FTA
B)Australia-Chile FTA
C)Australia-Brazil FTA
D)Singapore-Australia FTA

Question 37

The foreign direct investment level:

A)by the US is still the highest of any country.
B)by China became the highest of any country after 2004.
C)into the US is low compared with the flow into China.
D)None of the above

Question 38

Which of the following is not a market agreement?

A)Group of Eight
B)The Mercosur in Latin America
C)The Gulf Cooperation Council (GCC)
D)North American Free Trade Agreement (NAFTA)

Question 39

Which of the alternatives represents a challenge for the IMF in the next years?

A)It is quite unclear whether stringent economic rules and performance measures are equally applicable to all countries seeking IMF assistance.
B)New economic conditions that have not been experienced to date, such as the privatisation of formerly centrally planned economies, may require different types of approaches.
C)The link between economic and political stability requires more and different considerations, therefore magnifying but also changing the mission of the IMF.
D)All of these choices

Question 40

Which of the following is not a reason why exports are important in a macroeconomic sense?

A)They bring in technology and skills.
B)They can affect currency values and the fiscal and monetary policies of governments.
C)They shape public perception of competitiveness.
D)They determine the level of imports a country can afford.

Question 41

The world's largest market is currently:

A)China
B)European Union
C)Commonwealth of Independent States
D)USA

Question 42

Protectionism is not the answer to enhancing world trade because:

A)it will force world trade to expand unsustainably.
B)it cannot increase productivity and competitiveness in the long run.
C)the increase in living standards is not sustainable in the long term.
D)None of the above

Question 43

The balance of trade may be too far in the red - for instance, ________ - or there may be an embarrassingly high surplus, such as __________.

A)USA; China
B)Australia; USA
C)Australia; New Zealand
D)Indonesia; China

Question 44

Which of the following statements is true?

A)Policy makers can't sacrifice short-term achievements for long-term goals.
B)Thoughtful economic coordination will be required among the leading trading nations.Such coordination will result in the increase of national sovereignty.
C)Policy makers must be willing to trade off short-term achievements for long-term goals.
D)The beneficiaries of trade and investment restraints are usually not clearly defined and have much to gain, whereas the losers are much more visible.

Question 45

US trade policy tends to be:

A)positive rather than reactive and ad hoc.
B)ignorant of the nation's growing trade deficit.
C)formulated based on short-term domestic political considerations.
D)ignorant of the nation's growing trade deficit and formulated based on short-term domestic political considerations.

Question 46

Methods of restricting trade include:

A)bon-tariff barriers.
B)voluntary restraints.
C)political will.
D)bon-tariff barriers and voluntary restraints.

Question 47

Which of the following statements is incorrect?

A)Australia and New Zealand are both trade-oriented, liberalised economies.
B)The USA is currently the world's largest market, so American perspectives on trade policy are of great concern and important for international marketers.
C)closer government-business collaboration is not seen as one key to enhanced competitiveness of the American economy and corporations.
D)All the alternatives are correct.

Question 48

Bilateral negotiations are:

A)always broad, covering a wide variety of products, services or investments.
B)between one exporting firm and a host nation.
C)carried out mainly between two nations.
D)useful for vertical movement on the international vertical supply chain.

Question 49

A broad-scale multilateral negotiation is when:

A)concessions can be traded off among countries.
B)there is a clearly identified winner and loser for each issue.
C)there are only two nations involved.
D)there is less chance for long-term success because no one wants to be the loser.

Question 50

Non-tariff barriers:

A)are more difficult to detect, prove and quantify than tariff barriers.
B)are less difficult to detect, prove and quantify than tariff barriers.
C)include preferential treatment for domestic bidders and government 'buy domestic' campaigns.
D)are more difficult to detect, prove and quantify than tariff barriers and include preferential treatment for domestic bidders and government 'buy domestic' campaigns.

Question 51

Examples of trade barriers include:

A)import and export policies.
B)government procurement.
C)investment barriers and competitive practices.
D)intellectual property protection.

Question 52

_________ are special because they can affect currency values and the fiscal and monetary policies of governments, shape _______ perception of competitiveness and determine the level of _______ a country can afford.

A)Imports; public; exports
B)Exports; organisational; imports
C)Exports; public; imports
D)Exports; brand; imports

Question 53

What are the advantages and disadvantages of trade restrictions?

Question 54

In light of persistent ____________, growing ____________ and the tendency by some firms and industries to seek legislative redress for failures in the marketplace, the US Congress in the past two decades has increasingly been willing to provide the president with more powers to_________ trade.

A)trade deficits; FDI; restrict
B)trade surplus; foreign direct investment; encourage
C)trade deficits; FDI; restrict
D)trade surplus; foreign direct investment; encourage

Question 55

Export promotion assistance to firms is:

A)offered because of the need to earn foreign currency.
B)a distortion of profitability.
C)justifiable if it decreases market transparency.
D)All of these choices

Question 56

Consider the effects of export and import.

Question 57

Explain three types of trade barriers.

Question 58

What is the official Australian government source of information on trade policy?

A)Department of Foreign Affairs and Trade
B)Ministry of Foreign Affairs and Trade
C)Department of Export and Immigration
D)Ministry of Foreign Trade