Question 1

In the context of monetary barriers, blockage is ideally accomplished when

Accepted Answer

Blockage in the context of monetary barriers is ideally accomplished when a country refuses to allow an importer to exchange its national currency for the country's currency, effectively preventing the importer from buying goods within that country.

Question 2

One country refuses to sell goods to its neighboring country based on the belief that the neighboring country harbors radicals and terrorists. In this case, the refusal is referred to as a(n)

Accepted Answer

An embargo is a government order that restricts commerce or exchange with a specified country or the exchange of specific goods. In this case, the refusal to sell goods to a neighboring country because of the belief that it harbors radicals and terrorists is an example of an embargo.

Question 3

What trade policy tool makes it mandatory for its importers who want to buy a foreign good to apply for an exchange permit?

Accepted Answer

The answer of What trade policy tool makes it mandatory...

Question 4

________ pricing is the practice whereby a foreign producer intentionally sells its products in the United States for less than the cost of production to undermine the competition and take control of the market.

Accepted Answer

Predatory pricing is the strategy where a company sells its products or services at a lower price than the cost of production with the intent to eliminate competition or to establish a monopoly in the market.

Question 5

The United States and other countries require some products (automobiles in particular) to contain a percentage of "local content" to gain admission to their markets. This is an example of the stringent usage of ________ to restrict trade.

Accepted Answer

This is an example of using "standards" as a trade restriction. By requiring a certain percentage of local content, countries set a standard that must be met for products to enter their market, which can restrict international trade by making it harder for foreign products to qualify.

Question 6

The marketing manager for Glorious Products wants to export the company's line of fashion boots to an EU country. However, she discovers that there is a complete restriction on the import of any form of leather into that country. This is an example of

Accepted Answer

A boycott is a complete restriction or ban on the import of certain goods, in this case, leather, into a country.

Question 7

A boycott on importing produce from Mexico would be an example of a

Accepted Answer

A boycott on importing produce from Mexico is an example of a nontariff barrier, which includes measures such as quotas, embargoes, sanctions, and other restrictions that countries use to limit goods coming into the country, without involving taxes or tariffs.

Question 8

If a country decided to refuse to allow an importer to exchange its national currency for the sellers' currency, it would be an example of a(n) ________ currency.

Accepted Answer

A blocked currency is a situation where a country refuses or restricts the ability to exchange its national currency for foreign currencies, often as part of broader economic or political measures.

Question 9

The tariff on certain goods is based on the percentage of the determined value of the item being imported. What type of tariff is this?

Accepted Answer

Ad valorem duty is a type of tariff that is based on the percentage of the value of the item being imported.

Question 10

A specific unit or dollar limit applied to a particular type of good is called a(n)

Accepted Answer

A quota is a government-imposed trade restriction that limits the number or monetary value of goods that can be imported or exported during a specific time period, fitting the description provided.

Question 11

________ is/are a nontariff barrier that was specifically designed to prevent foreign producers from using predatory pricing to take control of U.S. markets.

Accepted Answer

Antidumping laws are designed to protect domestic industries from foreign companies engaging in predatory pricing, which involves selling products at below market value to undermine local businesses and take control of the market.

Question 12

Exporting countries primarily agree to voluntary export restraints (VERs) to

Accepted Answer

Voluntary export restraints (VERs) are typically agreed upon by exporting countries to avoid the imposition of stiffer, more restrictive quotas or tariffs by the importing country. This can be a strategic move to maintain access to a valuable market while addressing concerns of the importing country about protecting its domestic industries.

Question 13

Voluntary export restraints are commonly used in what industry?

Accepted Answer

Voluntary export restraints are often used in the agriculture industry to manage trade relationships and protect domestic markets from foreign competition.

Question 14

Which statement is true of tariffs?

Accepted Answer

Tariffs often increase special interests' privileges by protecting domestic industries from foreign competition, allowing these industries to maintain higher prices and market share within the domestic market. This protection can lead to lobbying and political influence by these industries to maintain or increase tariffs for their benefit.

Question 15

Which trading partner of the United States became its number one "trade problem" at the beginning of the 21st century?

Accepted Answer

China became the United States' number one "trade problem" at the beginning of the 21st century due to issues such as trade imbalances, intellectual property theft, and concerns over unfair trade practices.

Question 16

If a country refuses to sell some products to another country, it is utilizing which barrier to trade?

Accepted Answer

An embargo is a government order that restricts commerce or exchange with a specified country or the exchange of specific goods. When a country refuses to sell some products to another country, it is utilizing an embargo as a barrier to trade.

Question 17

Active Bicycle Company has just received notice that a shipment of 300 bicycles has been rejected by the customs administration of the recipient country because the bikes did not include a metal plate surrounding the chain. What category of nontariff barriers primarily uses such quality issues as a trade barrier?

Accepted Answer

Standards are a category of nontariff barriers that focus on the specific technical requirements or quality issues of products. In this case, the requirement for a metal plate surrounding the chain on bicycles is an example of a standard that must be met for the product to be accepted in the recipient country.

Question 18

An exchange permit can stipulate the

Accepted Answer

The answer of An exchange permit can stipulate the
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Question 19

In order to effectively secure foreign exchange, what is most likely to be used by countries experiencing severe shortages of foreign exchange?

Accepted Answer

Countries experiencing severe shortages of foreign exchange often implement government approval systems to control and manage the allocation of foreign currency for imports and other transactions.

Question 20

A voluntary export restraint is an agreement signed willingly between the importing country and the exporting country for a restriction on the

Accepted Answer

A voluntary export restraint (VER) is an agreement between an exporting country and an importing country where the exporting country agrees to limit the quantity of goods exported to the importing country. This is done to avoid more severe trade restrictions or tariffs that the importing country might impose.

Quiz 2: The Dynamic Environment of International Trade