Question 1

Which of these would be considered a non-tariff barrier?&#10;A) A marking duty assessed to cover costs of marking imported goods with the country of origin.&#10;B) The EU ban on hormone-treated beef from the United States.&#10;C) A 30% tax on Japanese steel entering the United States.&#10;D) The US government collects 51 cents for every imported wristwatch.

Accepted Answer

This duty can be categorized as a type of tariff.

Question 2

NAFTA is an example of a customs union.

Accepted Answer

NAFTA is actually an example of a free trade area.

Question 3

The fastest growing regional economy in the world is _______________.&#10;A) the European Union&#10;B) Asia&#10;C) the United States&#10;D) the Middle East, due largely to oil revenues

Accepted Answer

As of 2005, Asia's share of world GDP on a Purchasing Power Parity basis exceeded that of the United States and the European Union.

Question 4

Custom unions possess the provisions of free trade areas as well as a common external tariff barrier for member countries.

Accepted Answer

Custom unions are a form of regional integration where member countries not only eliminate trade barriers among themselves but also establish a common external tariff to non-member countries. Therefore, custom unions possess the provisions of free trade areas plus a common external tariff.

Question 5

The fact that EFTA does not operate with a common currency has put its member nations at a comparative economic disadvantage to the nations of the European Union.

Accepted Answer

This does not seem to be the case. Residents of the EFTA countries are more than twice as wealthy as those in the EU. They also enjoy lower inflation, higher employment, healthier budget surpluses and lower real interest rates. Interestingly, they also export more per capita than EU countries.

Question 6

The American Trade Agreements Act of 1979 requires that _____________________.&#10;A) the U.S. government agencies only purchase goods made in America&#10;B) the government subsidize all U.S. manufacturers producing defense-related equipment&#10;C) the United States comply with all trade agreement proposals initiated by the World Trade Organization&#10;D) the U.S. government agencies buy products that undergo substantial transformation or final assembly in the United States or one of 30 approved countries

Accepted Answer

The U.S. government purchases goods and services worldwide.

Question 7

Foreign trade flows are concentrated in the developing countries.

Accepted Answer

Foreign trade flows are concentrated in developed countries, especially by the Triad nations; The United States, the European Union and China.

Question 8

Hank Paulson and Ben Bernanke's 2006 visit to China resulted in a reduction of China's trade surplus with the U.S.

Accepted Answer

The most critical item of the agenda was (and still is) China's growing trade surplus with the United States, which reached nearly $200 billion at the time of the visit. By 2009, the trade surplus had risen to $227 billion.

Question 9

Global and regional trade agreements differ in that ______________________________________.&#10;A) global trade agreements allow many countries to trade free from most restrictions, while regional agreements lower barriers among members, but not non-members&#10;B) global trade agreements provide restriction-free trade opportunities for all nations, while regional agreements limit trade barriers for developing nations only&#10;C) global trade agreements encompass all product and service categories, while regional agreements are specific to certain industry classifications&#10;D) global trade agreements lower trade barriers only for those countries that are part of the WTO

Accepted Answer

Global trade agreements, such as the World Trade Organization (WTO), generally allow many countries to trade free from most restrictions, while regional agreements, like the North American Free Trade Agreement (NAFTA), only lower barriers among members, not non-members. This means that global trade agreements have a wider reach than regional agreements, which are limited to specific geographic areas.

Question 10

Most economists support trade liberalization in a globalized world.

Accepted Answer

Most economists argue that trade liberalization promotes economic growth, creates jobs, and reduces poverty in both developed and developing countries. It increases competition, lowers prices, and improves the quality of goods and services, leading to overall welfare gains. However, some economists criticize trade liberalization for causing job losses, environmental degradation, and income inequality if not complemented with adequate social policies and redistribution measures.

Question 11

Quotas are defined as ___________________.&#10;A) limits on the amount of currency that can be allowed to leave the country&#10;B) taxes levied on exports&#10;C) limits on the amount of goods that can be imported into a country&#10;D) taxes levied on imported products

Accepted Answer

The answer of Quotas are defined as ___________________.&#10;A) limits on...

Question 12

Preferential trading terms among members,lower-cost access to member country markets,and the ease of harmonizing market standards regionally are all rationale for ________________.&#10;A) the reduction in new regional trade agreements&#10;B) the success of the World Trade Organization&#10;C) the rise of regional integration movements&#10;D) the increase in non-tariff barriers

Accepted Answer

The answer of Preferential trading terms among members,lower-cost access to...

Question 13

Common markets ____________________________.&#10;A) offer free movement of people, but not capital&#10;B) have a common established currency&#10;C) include all the provisions of a customs union plus the free movement of people and capital&#10;D) include all the provisions of free-trade areas plus the free movement of people and capital

Accepted Answer

The answer of Common markets ____________________________.&#10;A) offer free movement of...

Question 14

Because members of the European Union have agreed both to free trade and the free movement of labor and capital,protectionism in the EU is non-existent.

Accepted Answer

The answer of Because members of the European Union have...

Question 15

Trading blocs and customs unions have resulted in all of the following circumstances except ________________.&#10;A) a concentration of trade within regions rather than globally&#10;B) the retention of flexibility over which sectors of industry to liberalize and which issues to negotiate&#10;C) the removal of trade barriers between member countries&#10;D) a shift from regional to global trade agreements

Accepted Answer

The answer of Trading blocs and customs unions have resulted...

Question 16

The economic crisis of 2008/2009 resulted in negative growth for most developed nations.

Accepted Answer

The answer of The economic crisis of 2008/2009 resulted in...

Question 17

A European Single Market was established when the EU and EFTA created the European Economic Area in 1994.

Accepted Answer

The answer of A European Single Market was established when...

Question 18

The World Trade Organization's 2003 Cancun Conference successfully came to agreement on most of their agenda's trade issues.

Accepted Answer

The answer of The World Trade Organization's 2003 Cancun Conference...

Question 19

A tax on imported goods is called a ___________________.&#10;A) tariff&#10;B) quota&#10;C) subsidy&#10;D) barrier

Accepted Answer

The answer of A tax on imported goods is called...

Question 20

The Triad nations include _______________________________.&#10;A) the United States, Japan and the European Union&#10;B) the United States, the European Union and China&#10;C) the United States, Canada and Mexico&#10;D) Taiwan, Russia, India, America and Dubai

Accepted Answer

The answer of The Triad nations include _______________________________.&#10;A) the United...

Question 21

A last,and most fully integrated,stage of trade integration is a _________________.&#10;A) political union&#10;B) customs union&#10;C) common union&#10;D) national union

Accepted Answer

The answer of A last,and most fully integrated,stage of trade...

Deck 5: Integrating Global, Regional, and National Markets