Question 1

Some environmentalists in industrial countries fear that the rules of international trade under the World Trade Organization

Accepted Answer

The statement mentions that some environmentalists fear that the rules of international trade under the World Trade Organization erode the environmental standards of member nations. Therefore, the best choice is D.

Question 2

Critics of the U.S.Trade Adjustment Assistance Program argue that

Accepted Answer

Critics of the U.S. Trade Adjustment Assistance Program argue that American workers whose jobs are displaced by imports are no more deserving of aid than other Americans suffering job losses. The other options are not directly related to criticisms of the program.

Question 3

The primary objective of the World Trade Organization is to

Accepted Answer

The primary objective of the World Trade Organization (WTO) is to liberalize international trade among member countries. This includes reducing or eliminating trade barriers, such as tariffs and quotas, and promoting fair and non-discriminatory trade policies. The WTO also provides a forum for negotiations and dispute resolution among member countries. While the WTO does consider the needs of developing countries, its focus is on promoting open trade and economic growth for all member nations.

Question 4

It is generally agreed that the Smoot-Hawley Act of 1930 led to improvements in U.S.exports and an overall increase in U.S.output and employment.

Accepted Answer

The statement is false. While the Smoot-Hawley Act did lead to increases in U.S. exports and output in certain sectors, it also led to retaliatory tariffs from other countries and an overall decrease in international trade, which had negative impacts on employment and the economy as a whole.

Question 5

With the passage of the Smoot-Hawley Act in 1930, U.S.average tariffs were raised to over 50 percent on protected imports.

Accepted Answer

The statement is true.

Question 6

Advocates of the U.S.Trade Adjustment Assistance Program maintain that it

Accepted Answer

The Trade Adjustment Assistance Program helps workers who have lost their jobs due to international trade by providing job training, income support, and other services. This program increases the political acceptances of efforts to reduce trade barriers, as it shows that the government is not leaving workers behind during the process of globalization. It does not subsidize firms with comparative advantages or decrease the prices of imports that compete with American-produced goods. It is also unrelated to the United States' status as a net exporter of oil and natural gas.

Question 7

Critics of the World Trade Organization maintain that liberalized trade can result in

Accepted Answer

Critics of the World Trade Organization argue that liberalized trade can lead to environmental degradation, as firms may prioritize profit over environmental concerns. The Japanese Market for Jetliners in Figure 6.5 does not provide any evidence to support options B, C, or D.

Question 8

According to some labor unions in advanced countries such as Canada and the United States, the international trade rules of the World Trade Organization could result in

Accepted Answer

Some labor unions in advanced countries such as Canada and the United States have expressed concern that the international trade rules of the World Trade Organization could result in reductions in job protections for workers. This is because some countries may have lower labor standards and wages, making it more attractive for companies to move their operations to those countries, resulting in job losses in the advanced countries.

Question 9

The ______________ was created to administer the provisions of multilateral trade agreements, to resolve international trade disagreements, and to meet periodically to consider new trade liberalization agreements.

Accepted Answer

The World Trade Organization (WTO) was created to administer the provisions of multilateral trade agreements, to resolve international trade disagreements, and to meet periodically to consider new trade liberalization agreements. The North American Free Trade Agreement (NAFTA) and the European Union (EU) are regional economic agreements, while the World Bank is a financial institution that provides loans to developing countries.

Question 10

According to the Reciprocal Trade Agreements Act of 1934, the president could lower tariffs by up to 50 percent of the existing level without congressional approval.

Accepted Answer

This is true. The Reciprocal Trade Agreements Act of 1934 allowed the president to negotiate and lower tariffs without congressional approval, up to a certain extent.

Question 11

Proponents of the Smoot-Hawley Act of 1930 viewed it as a means of combating domestic unemployment.

Accepted Answer

Proponents of the Smoot-Hawley Act believed that it would protect domestic industries and reduce unemployment by limiting imports and promoting domestic production.

Question 12

The high point of U.S.protectionism occurred with the passage of the Kennedy Act in the 1960s.

Accepted Answer

The high point of U.S. protectionism occurred with the passage of the Smoot-Hawley Tariff Act in the 1930s, not the Kennedy Act in the 1960s.

Question 13

Who is most likely to support the mission of the World Trade Organization? extreme environmentalists

Accepted Answer

Proponents of free trade based on comparative advantage are most likely to support the mission of the World Trade Organization, which seeks to promote and facilitate free and fair trade among its member countries. Extreme environmentalists may have concerns about certain trade practices, but their primary focus is on protecting the environment rather than promoting trade. Proponents of protectionist trade barriers and those desiring anarchy as the new global order are unlikely to support the WTO's mission.

Question 14

Which international organization meets on a regular basis to establish rules for international commerce?

Accepted Answer

The World Trade Organization (WTO) meets on a regular basis to establish rules for international commerce. The other options (NAFTA, World Bank, and IMF) may be involved in international commerce in their respective ways, but they do not have the primary role of establishing rules for international commerce like the WTO does.

Question 15

The World Trade Organization

Accepted Answer

The World Trade Organization (WTO) is an intergovernmental organization that facilitates international trade and negotiates the rules of trade among its member states. It serves as a forum for member countries to negotiate and enforce international trade agreements and to resolve trade disputes through its dispute settlement system. Thus, option C is the correct choice. Options A, B, and D are incorrect as they do not accurately describe the function of the WTO.

Question 16

As a condition for the World Trade Organization's enactment of new policies, developing countries pressure the World Trade Organization for

Accepted Answer

Developing countries often pressure the WTO for import tariff reductions in advanced countries in order to improve their own access to global markets.

Question 17

The purpose of the U.S.Trade Adjustment Assistance Program is to

Accepted Answer

The U.S. Trade Adjustment Assistance Program is designed to provide benefits to American workers who have lost their jobs or had their wages reduced due to international trade. It offers various forms of support, including job training, income support, and healthcare. It is not focused on providing production subsidies or protecting American jobs through import tariffs and quotas. Additionally, it is not intended to provide price supports to American farmers.

Question 18

Assume that trade restrictions are adopted by a country.The World Trade Organization would generally prefer a tariff to a quota because a tariff is more easily seen and its trade effects are more easily determined.

Accepted Answer

The World Trade Organization generally prefers a tariff to a quota because a tariff is more transparent and its effects on trade are easier to assess. Quotas are less transparent and can lead to trade distortions and rent-seeking behavior.

Question 19

If higher labor standards were implemented as a condition for support of more liberal trade rules of the World Trade Organization, such policies could

Accepted Answer

If higher labor standards were implemented, it would increase labor costs in developing countries where labor is cheaper, making it more difficult for them to compete in the global market. This could potentially harm labor in developing countries. On the other hand, labor in advanced countries would benefit from higher labor standards as they would have better working conditions and job security. Therefore, higher labor standards could help labor in advanced countries but harm labor in developing countries.

Question 20

Under the normal-trade-relations (most-favored-nation) principle, two nations agree to apply tariffs to each other at rates as low as those applied to any other nation.

Accepted Answer

This principle is commonly referred to as "most-favored-nation" (MFN) because each country is to be treated as the most-favored trading partner with respect to tariffs. This means that under the MFN principle, two nations agree to apply tariffs to each other at rates as low as those applied to any other nation.

Quiz 6: Trade Regulations and Industrial Policies