Deck 8: International Trade

Question 1

Tax breaks,loans,and guaranteed high prices are examples of what type of protectionism?

A)tariffs
B)quotas
C)standards
D)subsidies

Answer 1

D

Question 2

The U.S.__________ exceeded $750 billion in 2014,with about a quarter accounted for by trade with China and another quarter by oil imports.

A)surplus of consumer goods
B)trade deficit
C)trade surplus
D)restricted free trade

Answer 2

B

Question 3

A __________ would agree that a government's most useful role is to interfere in economics only to regulate markets in order to help them function efficiently.That is,politics should serve the interests of economic efficiency.

A)liberal
B)mercantilist
C)Marxist
D)communist

Answer 3

A

Question 4

A tariff is a type of tax imposed on __________ by a state.

A)luxury goods
B)revenues
C)imports
D)exports

Question 5

For decades,the country of Albania chose not to participate in world markets,instead relying on a centrally planned economy.This approach to trade is an example of what strategy?

A)self-reliance
B)cultural revolution
C)competition
D)embargo

Question 6

A state that avoids trading altogether and instead tries to __________ everything it needs by itself is following a strategy of autarky.

A)steal
B)borrow
C)produce
D)distribute

Question 7

A state will have a positive balance of trade,or trade surplus,when it __________.

A)imports a surplus of consumer goods
B)exports more than it imports
C)imports more than it exports
D)exports progressively more over a fiscal period

Question 8

"The creation of wealth underlies state power.Economics should serve politics" is a statement in line with __________.

A)liberalism
B)mercantilism
C)Marxism
D)communism

Question 9

Predatory practices are efforts to __________ capture a large share of world markets,or even a near-monopoly,so that eventually a company or state can raise prices without fearing competition.

A)legitimately
B)liberally
C)unfairly
D)autarkically

Question 10

Autarkic states tend to exhibit what type of growth?

A)average
B)high
C)low
D)cyclical

Question 11

The mercantilist approach to trade is similar to __________.

A)liberalism
B)realism
C)Marxism
D)communism

Question 12

The balance of trade is the value of a state's imports relative to its __________.

A)budget balance
B)trade status
C)exchange rate
D)exports

Question 13

Which policy would be followed by a protectionist state?

A)imposing tariffs
B)dumping
C)eliminating export duties
D)disallowing quotas on imports

Question 14

A unilateral method of protecting domestic producers from __________ by imposing a limit on the maximum volume of allowable imports is known as a quota.

A)tariffs
B)foreign competition
C)subsidies
D)predatory loans

Question 15

How does liberalism compare with mercantilism?

A)Liberalism is not concerned with whether one state gains more or less than another,just whether the state's wealth is increasing in absolute terms,whereas mercantilism emphasizes that each state must protect its own interests at the expense of others.
B)Liberalism emphasizes conflicting interests in economic exchanges,whereas mercantilism emphasizes shared interests.
C)Liberalism asserts that the most important goal of economic policy is the creation of the most favorable possible distribution of wealth,whereas mercantilism asserts that the most important goal is the maximum creation of total wealth.
D)Liberalism advocates a role for politics in market processes,whereas mercantilism advocates for market processes to be relatively unhindered by political elements.

Question 16

Applying quotas on imports is a policy that would be followed by a __________.

A)bureaucracy
B)conspirator
C)free-market capitalist
D)protectionist state

Question 17

When states specialize in producing the goods that they produce best and trading for goods that other states are better at producing,they are operating according to __________.

A)the comparative advantage
B)the absolute advantage
C)transaction costs
D)patterns of trade

Question 18

Proponents believed a positive balance of trade was essential to a state because it was a significant source of __________.

A)diplomacy
B)power
C)democracy
D)capitalism

Question 19

Protectionism hurts an economy in which way?

A)Consumers usually pay higher prices for products.
B)Domestic industries become more efficient.
C)Domestic industries become more competitive.
D)It leads to a declining balance of trade.

Question 20

Mercantilist practices were seen as essential to state power because __________.

A)the accumulation of precious metals could be converted into military assets when needed
B)these practices were known to broadly increase domestic living standards
C)liberal theories of trade were thought to be a wealth destroyer
D)prioritizing exports over imports allowed a state to export culture in addition to products

Question 21

The largest,and most comprehensive,regional free trade area is in __________.

A)North America
B)South America
C)Europe
D)Asia

Question 22

The existence of world markets may reduce the leverage that one state can exert over another in economic affairs because __________.

A)the supply and demand curves cross at the equilibrium price
B)the second state can find other partners
C)bilateral relations between states are more important in economic affairs than they are in security affairs
D)the distribution of benefits from trade may not be divided equally among participating states

Question 23

The __________ oversees the world's most important multilateral agreement on intellectual property.

A)United Nations
B)World Intellectual Property Organization
C)World Trade Organization
D)United States

Question 24

The fact that supply and demand do not always produce stability is demonstrated by the wild swings in the price of __________.

A)automobiles
B)steel
C)food
D)oil

Question 25

The current round of multinational trade negotiations,which began in 2001 and is struggling to reach a conclusion,is the __________ Round.

A)Bruges
B)Uruguay
C)Tokyo
D)Doha

Question 26

With respect to deficits,__________.

A)a state cannot have a budget deficit and a trade deficit at the same time
B)if a state has a trade deficit,it must have a budget deficit
C)the concepts of budget deficit and trade deficit are used interchangeably
D)a state can have a trade deficit without having a budget deficit

Question 27

Enforcement of trade agreements __________.

A)takes place under universal agreement on what is fair trade
B)depends on reciprocity
C)usually involves the United Nations Economic and Social Council
D)is ensured mostly by the United States and China

Question 28

The General Agreement on Tariffs and Trade was replaced by the __________ in 1995.

A)International Monetary Fund
B)World Bank
C)International Trade Organization
D)World Trade Organization

Question 29

The WTO provides an overall framework for __________ trade in a worldwide market.

A)limited
B)unilateral
C)bilateral
D)multilateral

Question 30

Retaliation for cases of dumping usually comes in the form of __________.

A)dumping in the offending state's market
B)quotas on the products being dumped
C)tariffs to raise the price back to market levels
D)subsidies for those companies being harmed

Question 31

In 2013,the WTO said Antigua and Barbuda could steal $21 million annually in U.S.intellectual property because the United States blocked the country's online gambling sites.This WTO decision is an example of __________.

A)patenting
B)retaliation
C)dumping
D)enforcement

Question 32

The second-largest trading partner of the United States is __________.

A)Japan
B)Great Britain
C)Canada
D)Mexico

Question 33

Which topic is on the agenda of the Doha Round of WTO trade negotiations?

A)forestry
B)industrial products
C)electronics
D)maritime treaties

Question 34

Trade in services includes __________.

A)banking and insurance
B)telecommunications and arms
C)tourism and textiles
D)computer technology and aerospace

Question 35

The Industrial Revolution began in __________ in the __________ century.

A)Germany,twentieth
B)Britain,eighteenth
C)the United States,nineteenth
D)France,eighteenth

Question 36

The leading arms-importing region of the global South is __________.

A)Africa
B)South Asia
C)Latin America
D)the Middle East

Question 37

The most prominent cartel in the international economy is the __________.

A)International Energy Agency
B)Organization of Petroleum Exporting Countries
C)North American Free Trade Agreement
D)Free Trade Area of the Americas

Question 38

Cartels form to __________ the price of a certain product,usually are formed by producers,most often __________ production by each member so as to lower supply,and can suffer from serious collective-goods problems.

A)manipulate,inflate
B)reduce,inflate
C)manipulate,limit
D)inflate,reduce

Question 39

Which country has used its large supply of oil to ensure the functioning of OPEC?

A)Kuwait
B)Venezuela
C)Saudi Arabia
D)Qatar

Question 40

The most profitable goods involved in illicit trade are __________.

A)gaming software and sound recordings
B)pharmaceuticals and weapons
C)weapons and drugs
D)drugs and DVD films

Question 41

Economic sanctions are used as political leverage on target states as a means of political interference.

Question 42

Completed in 1994,the Uruguay Round of the GATT added little to the global creation of wealth.

Question 43

When industries seek to influence a state's foreign economic policy,they __________.

A)all have a common goal
B)often face other industries with different goals
C)rely on their labor unions to develop appropriate strategies and goals
D)usually are seeking protection from foreign competitors

Question 44

Certain economic sectors have a tendency to deviate more than others from market principles,especially sectors pertaining to agriculture,intellectual property,services,and military goods.

Question 45

Which factor contributed to the industrialization of the United States?

A)limited natural resources as a result of territorial expansion
B)conversion from imported oil to domestic coal as a primary energy source
C)new technical innovations,such as electricity and airplanes
D)small numbers of immigrants coming to work in the United States

Question 46

A trade deficit is what mercantilists hope to produce for their own state.

Question 47

The protectionist Smoot-Hawley Act,adopted by the United States in 1930 in response to the Great Depression,contributed to the severity of the depression by __________.

A)allowing home industries to fail
B)provoking retaliation and reducing world trade
C)lowering consumer prices below profitable levels
D)easily allowing foreign competitors access to U.S.markets

Question 48

In Europe,North America,and several other less important instances,regional free trade areas have been created.

Question 49

Despite aiding particular industries,protectionist policies tend to slow down the global creation of wealth.

Question 50

Which statement is true about the capitalist world economy immediately after World War II?

A)The United States provided major assistance to rebuild Western Europe and Japan.
B)World trade declined as countries focused on rebuilding their domestic economies.
C)The Soviet Union and Eastern Europe began their transition to capitalism.
D)The capitalist world economy was restructured under joint U.S.-British-French leadership.

Question 51

Despite a critical shift toward a(n)__________ economy,China's government continues to follow a Marxist political line.

A)industrial
B)global
C)mixed
D)market

Question 52

The Soviet Union set prices and quotas for production and consumption of commodities,following communist principles.This approach to economics is an example of a __________ economy.

A)centrally planned
B)locally planned
C)stagnant
D)leading

Question 53

Which groups oppose free trade because of its negative impacts?

A)agriculture and manufacturing groups
B)labor and environmental groups
C)financial services and human rights groups
D)environmental and financial services groups

Question 54

The principle that whenever one __________ member-state lowers tariffs on certain kinds of imports from another member-state,all member-states are entitled to the same treatment with regard to their goods is known as most-favored nation principle.

A)WTO
B)UN
C)NAFTA
D)World Bank

Question 55

A backlash from politically active interest groups-including environmental and human rights NGOs,labor unions,and certain consumers-adversely affected by globalization has been a result of free-trade agreements.

Question 56

By the beginning of the twentieth century,__________ replaced __________ as the state with the world's largest and most advanced economy.

A)Germany,France
B)Japan,the United States
C)the United States,Britain
D)Britain,Germany

Question 57

Leading producers,sometimes in conjunction with leading consumers,occasionally use national cartels to control and stabilize prices for a commodity on world markets.

Question 58

Emphasizing worldwide free trade,liberal economics advocates for international cooperation.

Question 59

Which feature is characteristic of centrally planned economies?

A)Government officials set prices.
B)Religious authorities decide production quotas.
C)Consumers have a wide range of products from which to choose.
D)Governments cannot guarantee the basic needs of citizens.

Question 60

The world economy is decreasingly integrated on a global scale,generating wealth at a decelerating pace.

Question 61

Ensuring that participants keep their commitments,that contracts are binding,and that buyers pay for goods they purchase all are part of the __________ framework for markets.

Question 62

Industrial policy is the action of __________ to work actively with industries to promote their growth and tailor trade policy to their needs.

Question 63

Industrialized states give trade concessions to less-developed countries to help with their economic development through the __________.

Question 64

Economies that are changing to a market-based economy,usually from a centrally planned economy,are referred to as __________ economies.

Question 65

Because they contain both government control and private ownership,the industrialized economies of the West are often called __________.

Question 66

When states decide to reduce trade barriers and adopt a common tariff toward states that are not members of the group,they have created a(n)__________.

Question 67

The free-trade area comprising many countries in South America is the __________.

Question 68

In a free market,the supply and demand curves cross at the __________.

Question 69

The potential free-trade area in the Western Hemisphere,from Alaska to Argentina,is called the __________.

Question 70

The consumer cartel formed in response to OPEC is the __________.