Question 1

The Smoot-Hawley Tariff Act of 1930 has generally been associated with:

Accepted Answer

The Smoot-Hawley Tariff Act of 1930 is associated with intensifying the worldwide depression. This act raised tariffs on a wide range of imported goods, leading other countries to retaliate with their own tariffs, and ultimately reducing international trade and exacerbating the Great Depression.

Question 2

Adjustment assistance is sometimes used to assist:

Accepted Answer

Adjustment assistance is commonly used to retrain workers who have been displaced by imports. This helps to mitigate the negative effects of international trade on domestic workers and industries.

Question 3

As a way of helping American firms trade in the world market,U.S.trade law provides antitrust exemptions for horizontal combinations of American firms engaged solely in export trade.Such firms are permitted to form:

Accepted Answer

U.S. trade law provides antitrust exemptions for horizontal combinations of American firms engaged solely in export trade, allowing them to form export trade associations to facilitate their trade activities in the world market. These associations enable American firms to pool their resources, expertise, and market knowledge to compete more effectively against foreign rivals. By joining together in these associations, American firms can gain economies of scale, reduce their transaction costs, and negotiate better terms with foreign customers and suppliers. Thus, export trade associations are an important way to promote American exports and enhance the competitiveness of American firms in the global economy.

Question 4

Throughout the post-World War II era,the importance of tariffs as a trade barrier has:

Accepted Answer

Tariffs have generally decreased in importance as a trade barrier since the end of World War II due to the rise of global trade agreements and negotiations aimed at reducing or eliminating tariffs. Many countries have also lowered their tariffs in order to boost exports and attract foreign investment.

Question 5

Trade theory suggests that the United States would gain from a subsidy provided by Japan to its calculator producers if the gains to American consumers of calculators more than offset the losses to American calculator producers.This occurs as long as the United States:

Accepted Answer

According to trade theory, if the United States is a net importer of calculators, it would benefit from a subsidy provided by Japan to its calculator producers. This is because the subsidy would lead to lower prices for calculators, which would benefit American consumers. In contrast, the losses to American calculator producers would be outweighed by the gains to American consumers if the United States is a net importer of calculators. Therefore, choice A is the best answer.

Question 6

The Export-Import Bank of the United States encourages American firms to sell overseas by providing direct loans and loan guarantees to foreign purchasers of American goods.To American firms,this represents a:

Accepted Answer

The Export-Import Bank of the United States provides support to American firms selling overseas by offering direct loans and loan guarantees to foreign purchasers of American goods. This is an example of an export subsidy, which aims to make American products more attractive to foreign buyers by reducing the cost of purchasing these goods.

Question 7

A trade policy designed to alleviate some domestic economic problem by exporting it to foreign countries is known as a (an):

Accepted Answer

A trade policy designed to alleviate some domestic economic problem by exporting it to foreign countries is known as a "beggar-thy-neighbor" policy. The term refers to policies that seek to benefit one country at the expense of its trading partners. These policies are typically characterized by measures such as tariffs, import quotas, and currency devaluations that make a country's exports cheaper and its imports more expensive. While such policies may provide short-term relief for a country's domestic economy, they often lead to retaliation from trading partners and can ultimately harm the global economy as a whole.

Question 8

The World Trade Organization was established by the ____ of multilateral trade negotiations:

Accepted Answer

The World Trade Organization (WTO) was established by the results of the Uruguay Round of multilateral trade negotiations which took place between 1986 and 1994. The other rounds mentioned (Kennedy Round, Tokyo Round, Clinton Round) did not establish the WTO.

Question 9

Under U.S.commercial policy,the escape clause results in:

Accepted Answer

The escape clause, also known as the "safeguard provision," allows for temporary quotas to be granted to domestic firms that have been injured by import competition. This is done in order to protect these firms and provide them with time to adjust and regain their competitiveness.

Question 10

The high point of U.S.protection culminated with the passage of the:

Accepted Answer

The Smoot-Hawley Act of 1930 raised tariffs on over 20,000 imported goods, leading to retaliation from other countries and a decline in international trade. This act is often cited as a prime example of protectionism and its negative impact on the economy.

Question 11

For the United States,which organization makes loans to foreign buyers of U.S.manufactured goods?

Accepted Answer

The Export-Import Bank is a U.S. government agency that provides loans, guarantees, and insurance to foreign buyers of U.S. goods and services, including manufactured goods. Its mission is to support American jobs by facilitating exports from the United States.

Question 12

Under U.S.commercial policy,which clause permits the modification of a trade liberalization agreement on a temporary basis if serious injury occurs to domestic producers as a result of the agreement?

Accepted Answer

The Escape clause, also known as the safeguard clause, allows the temporary modification of a trade liberalization agreement if serious injury occurs to domestic producers as a result of increased imports. This clause is in accordance with U.S. commercial policy to provide relief to domestic industries affected by import surges while promoting international trade liberalization. The Adjustment Assistance clause provides aid to workers and firms directly affected by imports. The Most-favored-nation clause requires nondiscriminatory treatment among trading partners. The Reciprocal-trade clause provides for equal benefits and obligations for trade partners.

Question 13

Countervailing duties are intended to neutralize any unfair advantage that foreign exporters might gain over domestic producers because of foreign:

Accepted Answer

Countervailing duties are imposed by a country in response to foreign subsidies granted to their exporters. These duties are intended to neutralize any unfair advantage that foreign exporters might get over domestic producers. Tariffs are taxes that are imposed on imported goods, quotas limit the quantity of goods that can be imported, and buy-national policies give preference to domestic producers over foreign producers.

Question 14

____ attempt to produce a fair and free-trading environment in which there exists a level playing field.

Accepted Answer

Trade-remedy laws aim to prevent unfair trade practices and promote a fair and free-trading environment. These laws include anti-dumping and countervailing duties, which help domestic producers compete with cheaper imports that are unfairly subsidized or sold at below-market prices. Industrial policies and strategic trade policies may not necessarily promote a level playing field and could potentially distort competition, while economic sanctions are typically used as a tool for political coercion rather than to promote fair trade.

Question 15

The Uruguay Round of Multilateral Trade Negotiations accomplished all of the following except:

Accepted Answer

The answer of The Uruguay Round of Multilateral Trade Negotiations...

Question 16

Which policy reflects the notion that if society enjoys gains due to increased efficiency stemming from trade liberalization,some sort of compensation should be provided to those who are temporarily hurt by import competition?

Accepted Answer

Trade adjustment assistance reflects the notion that those who are temporarily hurt by import competition should receive some sort of compensation. This policy provides job training, education, and other support to workers who lose their jobs or experience reduced hours due to trade liberalization. Countervailing duties are tariffs imposed to offset subsidies given by foreign governments to their businesses, while domestic subsidies are financial assistance given by a government to its own producers. The most-favored-nation standard is a principle of non-discrimination that requires countries to treat all trading partners equally, without giving special treatment to any one country.

Question 17

The U.S."trade-remedy laws" could establish all of the following except:

Accepted Answer

The U.S."trade-remedy laws" primarily deal with protecting domestic industries from unfair practices in international trade. Economic sanctions against hostile nations are not directly related to trade remedies and are dealt with through different policies and laws.

Question 18

Under the original provisions of the Reciprocal Trade Agreements Act,the president of the United States was authorized to cut tariffs up to:

Accepted Answer

The original provisions of the Reciprocal Trade Agreements Act authorized the president of the United States to cut tariffs up to 50 percent. This allowed the president to negotiate trade agreements with other countries and reduce tariffs on goods imported from those countries. The act was passed in 1934 and helped to increase international trade and stimulate the economy during the Great Depression.

Question 19

The General Agreement on Tariffs and Trade and its successor,the World Trade Organization,have resulted in:

Accepted Answer

The General Agreement on Tariffs and Trade (GATT) and its successor, the World Trade Organization (WTO), have led to reductions in trade barriers through multilateral negotiations. These negotiations have resulted in lower tariffs, reduced non-tariff barriers, and the elimination of quotas and other trade restrictions. The objective of both GATT and WTO is to promote free trade and reduce protectionism in international trade. Therefore, the option D is the best choice. A and B are not correct as they suggest the termination of import/export subsidies and tariffs while there is no proof that it's a direct result of GATT or WTO. C is also incorrect as it suggests encouragement of beggar-thy-neighbor policies, which is contrary to the main objective of GATT and WTO.

Question 20

The principle of normal trade relations (most-favored-nation)treatment was established with the passage of the:

Accepted Answer

The principle of normal trade relations (most-favored-nation) treatment was established with the passage of the Reciprocal Trade Agreements Act of 1934. This act allowed the president to negotiate reciprocal trade agreements with other countries, and included the principle of non-discrimination in trade, meaning that each country would extend equal trading privileges to all other countries with which it had a trade agreement. This principle became known as normal trade relations or most-favored-nation treatment.

Quiz 6: Trade Regulations and Industrial Policies