Deck 6: Free Trade

Question 1

Providing farmers with subsidies would violate the theory of comparative advantage.

Answer 1

True

Question 2

Which of the following was a motivating factor for the establishment of the liberal international economic order?

A)The end of the Cold War
B)World War I
C)A belief in its universal benefits
D)Decolonization

Answer 2

C

Question 3

The Corn Laws

A)reflected the economic nationalism of the 1920s.
B)are an integral part of NAFTA.
C)were an early example of free trade legislation.
D)restricted agricultural imports.

Answer 3

D

Question 4

Since World War II, most nations have practiced free and open trade for the first time.

Question 5

Which of the following points is NOT usually part of the arguments against free trade?

A)Free trade leads to economic inefficiency.
B)Free trade neglects the security dimensions of economic dependence.
C)The interests of the wider community are often sacrificed for the short-terms interests of consumers.
D)Free trade ignores non-economic values that should be included when evaluating the impact of trade.

Question 6

Richard Cobden

A)was one of the founders of the World Bank.
B)advocated mercantilism.
C)worked for repeal of the Corn Laws.
D)opposed the North American Free Trade Agreement.

Question 7

A ______________ international economic order emphasizes the importance of free trade.

A)liberal
B)realist
C)Marxist
D)collective

Question 8

Free riders restrict access to their markets while enjoying access to foreign markets.

Question 9

Friedrich List argued that nations should always obtain what they need from abroad if it is cheaper than producing it domestically.

Question 10

The Liberal International Economic Order has been in place since

A)the end of World War II.
B)the French Revolution.
C)the League of Nations was created.
D)the American Revolution.

Question 11

Friedrich List thought nations need to worry about the political consequences of becoming economically dependent on others.

Question 12

Dumping and predatory pricing

A)might be components of strategic trade policy.
B)were favored by David Ricardo.
C)are promoted by the WTO.
D)were denounced by Friedrich List.

Question 13

According to the theory of comparative advantage,

A)economic specialization is generally a good thing.
B)trade is bad because it makes states vulnerable.
C)free trade benefits consumers.
D)new industries need to be protected from foreign competition.

Question 14

Strategic trade policy

A)is consistent with the theory of comparative advantage.
B)tries to create economic dependencies.
C)was advocated by David Ricardo.
D)is central to the Liberal International Economic Order.

Question 15

The World Trade Organization's mission is to promote free and open trade.

Question 16

Friedrich List

A)argued for repeal of the Corn Laws.
B)rejected free trade in all instances.
C)was instrumental in creating the LIEO.
D)thought free trade could sometimes harm national interests.

Question 17

The Corn Laws attempted to protect U.S.farmers from Mexican competition under NAFTA.

Question 18

David Ricardo is famous for his theory of comparative advantage.

Question 19

The assumption that the interests of individual consumers are consistent with the interests of the larger society and nation

A)is an integral part of the case for free trade.
B)is an integral part of the case against free trade.
C)was advanced by Friedrich List.
D)was rejected by David Ricardo.

Question 20

A situation in which one person's loss is another person's gain is often described as

A)comparative advantage.
B)zero-sum.
C)positive-sum.
D)realism.

Question 21

Most of the arguments for and against free trade have not changed much since the days of David Ricardo and Friedrich List.Discuss how each of these men thought about international trade, emphasizing their key points of disagreement.

Question 22

__________________________ argued that industries often needed to be protected from international competition when still in their early stages of development.

Question 23

Under "fair trade," nations would need to import the same amount they export.

Question 24

The idea of including labor and safety standards in trade agreements is one example of the movement for ____________________.

Question 25

The end of the Cold War lessened trade disputes among the United States, Europe and Japan.

Question 26

What were the motivating forces and ideas behind the creation of the liberal economic order?

Question 27

Excessive inspection regulations that make it difficult to import agricultural products are examples of __________________ that can impede free trade just as much as traditional means of protectionism.

Question 28

The three major institutions of the current liberal international economic order are _________________________, _______________________ and ________________.

Question 29

A ____________________ situation is one in which it is possible for all parties to benefit simultaneously, whereas in a _________________ situation one person's gain comes at the expense of another person's loss.

Question 30

According to Friedrich List, international trade is always a positive-sum game.

Question 31

During the nineteenth century, Britain's repeal of _____________________ represented an early victory for the advocates of free trade.

Question 32

David Ricardo is best known for his theory of ________________________.

Question 33

According to advocates of free trade, the global economy should be based upon a ___________________________, not by an attempt of nations to produce all the goods and services that they want/need.

Question 34

What do you see as the major strengths and weaknesses of the case for free trade?

Question 35

A _________________________ policy might seeks to make other states dependent by selling products at a loss to drive their industries out of business.

Question 36

Advocates of free trade argue that consumers are always at an advantage when they can pay less for the things they need and want regardless of where in the world they are produced.Others are not quite so certain.Explain.

Question 37

The post-war ______________________ was in large part a response to the widespread belief that protectionism in the 1920s caused the Great Depression.

Question 38

A ____________________ is a nation that enjoys access to the markets of other countries but restricts their access to its markets.

Question 39

Trade barriers are greater within the European Union than with the rest of the world.

Question 40

One of the recurring issues in thinking about international relations generally is the distinction between domestic and international politics.How is this debate reflected in debates over the desirability of free trade?