Deck 5: Trade Protectionism

Question 1

What are the roles of the Bretton Woods institutions?

Answer 1

Not Answer

Question 2

According to Dunning's OLI Framework a firm's foreign investment decisions are driven by:
(a) Ownership, Internationalization and Legal factors
(b) Overseas, Internalization and Location factors
(c) Ownership, Location and Internalization factors
(d) Ownership, Language and Internalization factors

Answer 2

C

Question 3

What is meant by the employment argument which is used by some national governments to justify protecting certain domestic industries? Provide a real world example to illustrate your answer.

Answer 3

Not Answer

Question 4

Based on the Heckscher-Ohlin model why would you expect a country such as India to export hand-made carpets while a country such as Germany would be expected to import these products?

Question 5

According to the International Product Cycle Theory comparative advantage shifts to developing countries such as Mexico, India and China in the _________ stage of the cycle.
(a) First
(b) Second
(c) Third
(d) Fourth

Question 6

Unlike the International Product Cycle Theory, Porter's Diamond of National Advantage suggests that countries can maintain their competitive advantage in specific industries over long periods of time irrespective of the impact of labor costs.

Question 7

Tariffs and quotas are both measures used by national governments to protect domestic industries. What is the difference between a tariff and a quota?

Question 8

Which is NOT a form of government export promotion?
(a) Provision of market intelligence to local firms
(b) Establishing voluntary export restrictions on local firms
(c) Providing export subsidies to local firms
(d) Providing export financing to local firms

Question 9

Voluntary export restraints have been used mainly in areas such as textiles, automobiles, and steel and are intended to:
(a) Help companies in the importing nation survive
(b) Show good political citizenship by members
(c) Penalize producers of raw materials and manufactured products
(d) Stimulate import demand in countries that are not members of a trading bloc

Question 10

The Mexican ambassador to Canada knew exactly why he was being asked to attend a meeting in Ottawa. Mexican vegetable farmers were rumored to be subsidized by their government. Canadian farmers in British Columbia and Ontario (two Canadian provinces) had complained to the Canadian government calling for the imposition of ________________ on Mexican imports. The Mexican ambassador knew that if he was not careful in discussions with trade officials in Ottawa the matter could soon be before the World Trade Organization.
(a) Countervailing duties
(b) Subsidies
(c) Liens
(d) Sanctions

Question 11

____________________ establish a low tariff level on an initial quantity of the product being imported into the country but beyond an initial volume the tariff rate imposed on additional quantities imported escalates markedly.
(a) Tariff rate quotas
(b) Voluntary export restraints
(c) Countervailing duties

Question 12

According to transaction cost analysis, firms seek to minimize transaction costs in their efforts to expand and market their products globally. These may be classified as Contracting costs, Search costs, Monitoring Costs and Enforcement costs.

Question 13

What is meant by the infant industry argument which is used by some national governments to justify protecting certain domestic industries?

Question 14

The ___________ theory attempts to explain international trade by examining the pattern of consumer demand for products.
(a) Comparative advantage
(b) Heckscher-Ohlin
(c) Linder
(d) Absolute advantage