Deck 6: Business-Government Trade Relations

Question 1

Products that are of use in both industrial and military applications are designated as dual-use products.

Answer 1

False

Question 2

A voluntary export restraint refers to a quota that a nation imposes on its exports,usually at the request of another nation.

Answer 2

True

Question 3

Tariffs tend to exact a cost on countries as a whole because they lessen citizens' gains from trade.

Answer 3

True

Question 4

An import tariff is levied by the government of a country that a product is passing through on its way to its final destination.

Question 5

Unwanted cultural influence in a nation can cause governments to block imports that it believes are harmful.

Question 6

Consumers are benefitted when a government imposes import quotas on products.

Question 7

A disadvantage of protection from import competition is the added cost of continuing to produce a good domestically that could be supplied more efficiently by an international supplier.

Question 8

The automobile industry is typically protected for national security reasons.

Question 9

Receiving financing from government agencies is often crucial to the success of small businesses just beginning to export.

Question 10

The pattern of imports and exports that would result in lesser trade barriers is called free trade.

Question 11

Customs duties decrease the total amount of a good's production cost.

Question 12

Tariffs are a source of government revenue mostly among developing nations.

Question 13

The major purpose of foreign trade zones is to implement barriers to trade and commerce.

Question 14

Transit tariffs have been almost entirely eliminated worldwide through international trade agreements.

Question 15

The protection of infant industries by a nation's government can cause more economic harm than good.

Question 16

Industries considered essential to national security often receive government-sponsored protection.

Question 17

The main cultural motive behind government intervention in trade includes protection of domestic jobs.

Question 18

A compound tariff on an imported product is calculated partly as a percentage of its stated price and partly as a specific fee for each unit.

Question 19

The most common economic reason for nations attempts to influence international trade is preserving national security.

Question 20

The protection of infant industries by a nation's government can cause domestic companies to become complacent toward innovation.

Question 21

Which of the following is an example of a dual use product?

A)a blowdryer
B)a GPS navigation device
C)a food processor
D)a vacuum cleaner

Question 22

Which of the following is a political motive behind a government's intervention in trade?

A)promoting a strategic trade policy
B)gaining influence over other nations
C)protecting a country from unwanted cultural influence
D)protecting young industries from competition

Question 23

________ refers to the unwanted cultural influence in a nation that can cause great distress and lead governments to block imports it believes to be harmful.

A)Cultural imperialism
B)Cultural protectionism
C)Dumping
D)Capitalism

Question 24

The World Trade Organization can punish a country in which a company accused of dumping is based.

Question 25

Which of the following is prompting farmers in many developed nations to discover new ways to manage risk and increase agricultural efficiency?

A)enforcement of trade embargoes and tariffs
B)exposure of agribusiness to market forces
C)provision of extensive government subsidies
D)designation of agricultural products as dual use products

Question 26

An embargo is the most restrictive nontariff trade barrier available.

Question 27

The pattern of imports and exports that occurs in the absence of trade barriers is called ________.

A)vertical integration
B)autarky
C)protectionism
D)free trade

Question 28

Which of the following is true of government interventions in a country's trade practices?

A)A major economic motive behind government intervention in trade is the protection of jobs.
B)A major political motive behind government intervention in trade is the protection of infant industries.
C)Government interventions help companies take advantage of economies of scale and be the first movers in their industries.
D)Governments intervene to protect only imports,as the protection of exports is handled by private agencies.

Question 29

Which of the following is the main cultural motive behind government intervention in trade?

A)promotion of strategic trade policies
B)protection of jobs
C)protection of national identity
D)protection of young industries from competition

Question 30

Which of the following statements is true about cultural influences?

A)Culture and trade are independent of each other.
B)Unwanted cultural influence in a nation can cause governments to block imports that it believes are harmful.
C)The cultures of countries are independent of the effects of exposure to the people and products of other cultures.
D)The culture of the United States is readily adapted into the local culture of countries all over world.

Question 31

Which of the following countries is seen as a threat to national cultures around the world?

A)United States
B)India
C)Russia
D)France

Question 32

Which of the following industries is typically protected for national security reasons?

A)agriculture
B)textile
C)automobile
D)housing

Question 33

According to the ________ argument,as an industry grows and matures,it gains the knowledge it needs to become more innovative,efficient,and competitive.

A)maturing industry
B)infant industry
C)standardized product
D)developing economy

Question 34

When one World Trade Organization member files a complaint against another,decisions are to be rendered in less than one year.

Question 35

Which of the following is a result of the protection of domestic companies from international competition?

A)Consumers need to pay lesser for products.
B)There are increased incentives to cut production costs and improve quality.
C)Companies become more reliant on protection.
D)Protection increases a company's incentives to obtain the knowledge it needs to become more competitive.

Question 36

Which of the following do products designated as dual use require before exports can take place?

A)currency controls
B)countervailing duties
C)special government approval
D)local content requirements

Question 37

Restrictions on the convertibility of one currency into others is called administrative delays.

Question 38

Which of the following is true regarding the protection of infant industries from international competition?

A)It is difficult for governments to identify the industries worth protecting.
B)Protection of infant industries helps domestic companies become innovative.
C)Protection from competition leads to improved quality and lower prices.
D)Protection leads to more economic good than harm.

Question 39

Which of the following best describes the infant industry argument?

A)It states that small businesses that have just started to export are financially stable and seldom require financing from government agencies.
B)It states that protecting a country's emerging industries from international competition will enhance domestic companies' incentives to obtain knowledge to be competitive.
C)It states that a country's emerging industries need protection from international competition during their development until they become sufficiently competitive.
D)It states that domestic companies that are provided protection from international competition become more competitive and less reliant on protection.

Question 40

When a company exports a product at a price higher than the price normally charged in its domestic market,it is said to be dumping.

Question 41

A(n)________ tariff is levied as a percentage of the stated price of an imported product.

A)specific
B)compound
C)ad valorem
D)transit

Question 42

Which of the following financial companies in the United States is involved in activities of selling of goods abroad,and offers insurance on foreign accounts receivable?

A)National Cooperative Bank
B)Overseas Private Investment Corporation
C)Export-Import Bank
D)Inter-American Development Bank

Question 43

A(n)________ tariff is levied on an imported product and calculated partly as a percentage of its stated price and partly as a specific fee for each unit.

A)specific
B)compound
C)ad valorem
D)transit

Question 44

The most common tariffs used today are the ________ tariffs.

A)import
B)transit
C)inverted
D)export

Question 45

A(n)________ tariff is levied as a particular fee for each unit of an imported product.

A)specific
B)compound
C)ad valorem
D)transit

Question 46

Financial assistance given to domestic producers in the form of cash payments is an example of a(n)________.

A)ad valorem tariff
B)quota
C)subsidy
D)export tariff

Question 47

Which of the following statements is true of tariffs?

A)They are the major source of government revenue in developed nations.
B)They increase products' appeal to buyers.
C)They lower the effective prices of imports.
D)They protect domestic producers.

Question 48

A designated geographic region in which merchandise is allowed to pass with lower customs duties and/or fewer custom procedures is called a(n)________.

A)foreign trade zone
B)free trade area
C)single market
D)open border

Question 49

Which of the following is an instrument that governments use to promote trade?

A)embargoes
B)tariffs
C)export financing
D)administrative delays

Question 50

Government trade promotion agencies ________.

A)enable imports at discounts
B)set up foreign trade zones across the country
C)advertise in other countries to promote the nation's exports
D)place voluntary export restraints on companies that fail to export adequately

Question 51

Which of the following is a method of restricting trade?

A)export financing
B)local content requirements
C)subsidy
D)foreign trade zones

Question 52

A restriction on the amount of a good that can enter or leave a country during a certain period of time is called a(n)________.

A)administrative delay
B)local content requirement
C)quota
D)tariff

Question 53

A tariff levied by the government of a country that is selling goods abroad is called a(n)________.

A)export tariff
B)ad valorem tariff
C)compound tariff
D)specific tariff

Question 54

A common purpose of many companies' facilities in foreign trade zones is ________.

A)final product assembly
B)acquisition of raw materials
C)product design
D)product manufacturing

Question 55

Using tariffs to generate government revenue is most common among ________.

A)developed countries
B)developing countries
C)western nations
D)First World nations

Question 56

Which of the following statements is true of export financing?

A)Small businesses that have just started to export are financially stable and seldom require financing from government agencies.
B)The Ex-Im Bank finances the export activities of companies all over the world.
C)Governments usually offer loans to exporters with above-market interest rates.
D)Governments may promote exports by offering loan guarantees.

Question 57

A tariff levied by the government of a country that a product is passing through on its way to a final destination is called a ________ tariff.

A)transit
B)compound
C)export
D)specific

Question 58

Which of the following will add to the cost of an imported product by levying an additional tax upon it?

A)tariffs
B)quotas
C)local content requirements
D)embargoes

Question 59

Which of the following statements is true of foreign trade zone?

A)It is an area through which merchandise is allowed to pass with fewer procedures but higher taxes.
B)These areas provide very limited employment opportunities.
C)Goods imported into these zones require import licenses and are subject to import duties.
D)International companies can store goods in these zones without incurring taxes,before shipping them to other countries.

Question 60

Which of the following statements is true of tariffs?

A)Tariffs increase an imported product's appeal to buyers.
B)Transit tariffs are the most widely-levied tariffs.
C)Ad valorem tariffs are levied as a specific fee for each unit of an imported product.
D)Export tariffs are used by countries when they believe an export's price is lower than it should be.

Question 61

The ________ altered the U.S.trade policy from a stance of free trade to one of protectionism in the 1930s.

A)Norris-LaGuardia Act
B)Smoot-Hawley Act
C)Wheeler-Lea Act
D)Taft-Hartley Act

Question 62

Regulatory controls or bureaucratic rules designed to impair the rapid flow of imports into a country are called ________.

A)local content requirements
B)administrative delays
C)voluntary export restraints
D)import quotas

Question 63

Which of the following is true of quotas?

A)They are the most common type of trade barrier.
B)They help domestic producers maintain their market shares and prices.
C)Their licenses are granted by governments to other nation companies on a five-year basis.
D)They lead to a decrease in the prices of intermediate goods.

Question 64

A requirement that all WTO members extend the same favorable terms of trade to all members that they extend to any single member is called ________.

A)normal trade relations
B)antidumping duties
C)local content requirements
D)countervailing duties

Question 65

Countries might impose a(n)________ in response to the threat of an import quota or total ban on a product by an importing nation.

A)embargo
B)ad valorem tariff
C)compound tariff
D)voluntary export restraint

Question 66

Which of the following statements is true of embargoes?

A)An embargo may be placed on one or a few goods or may completely ban trade in all goods.
B)An embargo is the least restrictive nontariff barrier available.
C)An embargo is usually employed for economic reasons.
D)Embargoes are used frequently today because they are easy to implement.

Question 67

Purposely understaffing customs offices to cause time delays,requiring special licenses that take a long time to obtain,and requiring air carriers to land at inconvenient airports are all examples of ________.

A)local content requirements
B)import quotas
C)administrative delays
D)voluntary export restraints

Question 68

The purpose of ________ is to force companies from other nations to use local resources in their production processes,particularly labor.

A)administrative delays
B)currency controls
C)local content requirements
D)voluntary export restraints

Question 69

One of the main goals of the World Trade Organization is to ________.

A)encourage dumping among trading nations
B)restrict the free flow of trade
C)provide favorable terms of trade to a few selected countries
D)settle trade disputes among its members

Question 70

A(n)________ is the most restrictive nontariff trade barrier and is typically applied to accomplish political goals.

A)tariff-quota
B)subsidy
C)embargo
D)voluntary export restraint

Question 71

Restrictions on the convertibility of a currency into other currencies are referred to as ________.

A)administrative delays
B)currency crisis
C)local content requirements
D)currency controls

Question 72

Country A implements a ban on trade in two products with Country B.This is an example of a(n)________.

A)embargo
B)tariff-quota
C)tariff
D)voluntary export restraint

Question 73

Tariff-quotas are used extensively in the trade of ________.

A)manufactured goods
B)services
C)textiles
D)agricultural products

Question 74

When a company exports a product at a price that is lower than the price normally charged in its domestic market or lower than the cost of production,it is said to be ________.

A)dumping
B)ringfencing
C)hoarding
D)cost-shifting

Question 75

The Uruguay Round of Negotiations created the TRIPS Agreement to ________.

A)help standardize the intellectual property rules around the world
B)increase the exposure of national agricultural sectors to market forces
C)drastically reduce tariffs and nontariff barriers in agricultural trade
D)include international trade in services for the first time

Question 76

A lower tariff rate for a certain quantity of imports and a higher rate for quantities that exceed the quota is called a(n)________.

A)export quota
B)tariff-quota
C)ad valorem tariff
D)voluntary export restraint

Question 77

Which of the following statements is true of local content requirements?

A)It is a strategy mainly used by developed nations.
B)This strategy enforces companies to locate their manufacturing facilities in their home countries.
C)Local content requirements hurt domestic producers through their effect on prices.
D)It forces companies from other countries to employ local resources in their production processes.

Question 78

In which of the following ways did the Uruguay Round of Negotiations modify the original General Agreement on Tariffs and Trade (GATT)treaty?

A)It helped standardize intellectual property rules around the world.
B)It called on developing and least-developed economies to cut agricultural tariffs significantly.
C)It relaxed the additional tariffs imposed on companies charged with dumping.
D)It increased barriers to trade in all developed,developing and least-developed nations.

Question 79

A country imposes a tariff on goods that it sells abroad at the request of another nation.This is an example of a(n)________.

A)embargo
B)ad valorem tariff
C)compound tariff
D)voluntary export restraint

Question 80

Rice imports to a nation under a quota limit of 8,500 tons are charged a tariff of 15 percent.Imports of rice above the quota limit are charged a tariff of 60 percent.This is an example of a(n)________.

A)export quota
B)voluntary export restraint
C)ad valorem tariff
D)tariff-quota