Deck 6: US Agricultural and Food Sector Connections to the Global Economy

Question 1

The Trade Openness indicator

A) is equal to the quantity ($Imports - $Exports)
B) is equal to the quantity ($Exports - $Imports)
C) compares the sum of Exports plus Imports to the national Gross Domestic Product (GDP)
D) is equal to the quantity ($Exports/$Imports)
E) is equal to the quantity ($Imports/$Exports)

Answer 1

C
Explanation:The Trade Openness indicator compares the sum of exports plus imports to the national Gross Domestic Product (GDP)

Question 2

Trade Protectionist Policies have been a major reason for the worldwide movement toward economic, financial, trade, and communications integration known as globalization.

Answer 2

False
Explanation:Trade Liberalization Policies have been a major reason for the worldwide movement toward economic, financial, trade, and communications integration known as globalization.

Question 3

A Free Trade Agreement creates a trading arrangement with the least amoung of economic integration among trading partners, whereas a Monetary Union creates the most integration.

Answer 3

True
Explanation:A Free Trade Agreement creates a trading arrangement with the least amoung of economic integration among trading partners, whereas a Monetary Union creates the most integration.

Question 4

The strengths of a WTO negotiated trade agreement include

A) The Transparency Principle of Trade
B) Trade without Discrimination
C) The Binding Condition within a Trade Agreement
D) The National Treatment Prinicple of Trade
E) All of the above.

Question 5

________ means that any nation who qualifies for this status is guaranteed access to tariff rates that are as low as they are for any other nation. So, if a WTO member decreases its tariff rates to one trading country, then it will lower them to all.

A) The Binding Condition within a Trade Agreement
B) The National Treatment Prinicple of Trade
C) Trade without Discrimination
D) The Transparency Principle of Trade
E) The Absolute Advantage Principle of Trade

Question 6

The WTO Agreement on Agriculture distinguishes the greater or less market distorion of farm polices by using a colored-box traffic-light analogy. For example,

A) a ""red box"" policy is considered to have the least amount of market distorting impacts.
B) an ""amber box"" policy is considered to have the most harmful amount of market distorting impacts.
C) a ""black box"" policy is considered to have an unknown amount of market distorting impacts.
D) a ""yellow box"" policy is considered to have the least amount of market distorting impacts.
E) a ""violet box"" policy is considered to have a median or average amount of market distorting impacts.

Question 7

The US Congress legislated the OTCA in 1988 to

A) raise US import tariff barriers against cheap foreign imports.
B) reduce the exchange rate value of the US Dollar in an effort to encourage US exports.
C) reduce the US Trade Openness ratio down to more manageable levels.
D) to create ""Trade Promotion Authority"" for the President and the US Trade Representative, so that they could more easily negotiate trade agreements for the US.
E) slow down trade negotiations for the GATT and NAFTA.

Question 8

The MERCOSUR trading arrangement in South America is best described as a

A) An Economic Union
B) A Monetary Union
C) A Common Market
D) A Customs Union
E) A Free Trade Agreement

Question 9

Within the NAFTA Agreement, the US, Canada and Mexico each retain sovereign control over their own domestic ag/food policies; Each country has government programs and/or agencies that protect/support their own producers rather than act to create a complete and true "free trade environment."

Question 10

When comparing alternative types of trading arrangements, a ""common market"" requires less economic integration among its trading members that does a free trade agreement.

Question 11

When WTO members agree to apply internal regulations and taxes equally to both domestically- and foreign-produced goods, this practice is most accurately identified as

A) National Treatment Principle of Trade
B) Trade without Discrimination (or MFN)
C) Transparency Condition with a Trade Agreement
D) Binding Condition within a Trade Agreement
E) Trade Protectionism Policy

Question 12

When the equilibrium USD value "strengthens" (increases) relative to the Yen (¥), then

A) American consumers experience an increased cost of importing Japanese-made products.
B) Japanese consumers experience no change in the cost of importing American-made products.
C) US $Net Exports are expected to increase, ceteris paribus.
D) It is easier for American producers to sell their products to Japanese consumers.
E) Japanese consumers experience an increased cost of importing American-made products.

Question 13

In macroeconomics, as a nation's real Gross Domestic Product (GDP) increases, we expect a resultant

A) decrease in the nation's imports.
B) no change in the nation's imports.
C) a reduced value for its Trade Openness indicator.
D) increase in the nation's imports.
E) no change in the nation's currency exchange rate.

Question 14

the Law of Comparative Advantage predicts that two trading partners reach a mutually-advantageous transaction when each specializes in producing and selling the product for which it has a respective higher opportunity cost, and then trades for other products.

Question 15

The efforts to create broad trade agreements for a large cross section of nations, such as the GATT, is an example of multilateralism, whereas the US pursuit of individual and separate trade agreements with South Korea or Great Britain is an example of bilateralism.