Question 1

U.S.antidumping duties are intended to neutralize exports to the United States at prices below average total cost or exports to the United States at prices lower than those charged in the exporter's home market.

Accepted Answer

This statement correctly describes the purpose of U.S. antidumping duties.

Question 2

The classical theory of comparative advantage assumes that firms operate in imperfectly competitive markets, while the theory of strategic trade policy assumes that firms operate in perfectly competitive markets.

Accepted Answer

The classical theory of comparative advantage assumes that firms operate in perfectly competitive markets, while the theory of strategic trade policy assumes that firms operate in imperfectly competitive markets.

Question 3

In the post-World War II era, the U.S.government formed industrial policies to encourage the development of its aerospace, energy, shipbuilding, and defense industries.

Accepted Answer

The U.S. government did indeed form industrial policies to encourage the development of its aerospace, energy, shipbuilding, and defense industries in the post-World War II era.

Question 4

According to the strategic trade policy hypothesis, governmental subsidies granted to domestic producers can help them in capturing economic profits from foreign competitors.

Accepted Answer

The strategic trade policy hypothesis suggests that government subsidies can help domestic producers outcompete foreign competition and capture economic profits.

Question 5

According to the strategic trade policy hypothesis, government can alter the terms of competition to favor domestic companies, thus increasing their profits at the expense of their rivals.

Accepted Answer

The strategic trade policy hypothesis suggests that government intervention can improve the terms of competition to benefit domestic companies by increasing their profits relative to their foreign rivals.

Question 6

The Export-Import Bank provides export-credit subsidies to U.S.producers of agricultural goods.

Accepted Answer

The statement is incorrect. The Export-Import Bank provides export-credit subsidies to a variety of U.S. industries, including aerospace, but not exclusively agricultural goods.

Question 7

Copyrights, trademarks, and patents are used to protect the intellectual property of a nation from foreign imitators.

Accepted Answer

Copyrights, trademarks, and patents are legal tools used to protect intellectual property from foreign imitators. They are meant to safeguard inventions, designs, and creative works from being stolen or copied without permission.

Question 8

The U.S.government fosters large-scale projects such as irrigation facilities in agriculture.

Accepted Answer

The statement is true, as the text discusses the Japanese government's role in supporting large-scale projects in industries such as transportation and energy, similar to how the U.S. government supports irrigation facilities in agriculture.

Question 9

Unlike Germany and the United States, France has refrained from helping unemployed workers back into the labor force.

Accepted Answer

The statement is not related to the figure provided. It is talking about a different topic altogether.

Question 10

According to the strategic trade policy hypothesis, a subsidy granted to domestic exporters may lead to increased export profits, which more than offset the cost of the subsidy to domestic taxpayers.

Accepted Answer

According to the strategic trade policy hypothesis, a subsidy granted to domestic exporters may lead to increased export profits, which more than offset the cost of the subsidy to domestic taxpayers.

Question 11

Industrial policies of the U.S.government have included subsidizing particular firms to promote national champions, nationalizing basic industries, and encouraging cartelization of industries.

Accepted Answer

The U.S. government has generally avoided direct subsidies to promote national champions, nationalization, and encouraging cartelization, focusing instead on competition and market-driven policies.

Question 12

By reducing available supplies of a product, an export embargo leads to falling prices in the target nation and increasing target-nation consumer surplus.

Accepted Answer

An export embargo typically leads to an increase in prices in the target nation due to reduced supply, which can lead to a decrease in consumer surplus.

Question 13

As a way of helping U.S.business firms trade in the world market on more equal terms with their organized foreign competitors, the U.S.government permits them to form export trade associations and export trading companies.

Accepted Answer

This statement is true. The U.S. government does allow export trade associations and export trading companies to help American businesses compete in the global market.

Question 14

The strategic trade policy hypothesis assumes that domestic firms operate under increasing cost conditions as well as in perfectly competitive markets.

Accepted Answer

The strategic trade policy hypothesis typically assumes that domestic firms operate under conditions of imperfect competition, such as oligopolies, rather than in perfectly competitive markets.

Question 15

During the post-World War II era, the United States has adopted explicit industrial policies similar to those of France and Japan.

Accepted Answer

The United States has generally favored a more laissez-faire approach to economic management compared to the explicit and comprehensive industrial policies adopted by countries like France and Japan, which have involved significant government intervention in directing economic and industrial development.

Question 16

If the U.S.government pursued a "knowledge-based growth policy," it would subsidize particular firms to help them compete in the world economy.

Accepted Answer

A "knowledge-based growth policy" typically focuses on investing in education, research and development, and innovation across the economy rather than subsidizing specific firms. This approach aims to enhance the overall knowledge base and productivity of the economy.

Question 17

Intellectual property refers to holdings of rare books and pieces of art that are traded on the world market.

Accepted Answer

The statement is incorrect. Intellectual property refers to intangible creations of the human intellect such as inventions, designs, and literary and artistic works, which are protected under law and can be used for commercial purposes. It is not limited to rare books and art pieces.

Question 18

Industrial policy attempts to foster the development of industries that offer long-run comparative disadvantages and which are insulated from other sectors of the economy.

Accepted Answer

Industrial policy attempts to foster the development of industries that offer long-run comparative advantages, not disadvantages. Additionally, industrial policy often seeks to integrate the targeted industry with other sectors of the economy.

Question 19

Under the trade adjustment assistance program, a domestic firm or worker can file for governmental assistance only if it demonstrates that it suffered economic hardship that was due to imports of foreign-subsidized goods.

Accepted Answer

The Trade Adjustment Assistance (TAA) program provides aid to workers and firms that have been negatively affected by increased imports, not limited to those that are foreign-subsidized. It covers a broader range of trade impacts.

Question 20

Major beneficiaries of export-credit subsidies, granted by the Export-Import Bank, have included U.S.producers of aircraft, telecommunications, and power-generating equipment.

Accepted Answer

The statement mentions that U.S. producers of aircraft have been major beneficiaries of export-credit subsidies granted by the Export-Import Bank.

Quiz 6: Trade Regulations and Industrial Policies

U.S.antidumping duties are intended to neutralize exports to the United States at prices below average total cost or exports to the United States at prices lower than those charged in the exporter's home market.

The classical theory of comparative advantage assumes that firms operate in imperfectly competitive markets, while the theory of strategic trade policy assumes that firms operate in perfectly competitive markets.

In the post-World War II era, the U.S.government formed industrial policies to encourage the development of its aerospace, energy, shipbuilding, and defense industries.

According to the strategic trade policy hypothesis, governmental subsidies granted to domestic producers can help them in capturing economic profits from foreign competitors.

According to the strategic trade policy hypothesis, government can alter the terms of competition to favor domestic companies, thus increasing their profits at the expense of their rivals.

The Export-Import Bank provides export-credit subsidies to U.S.producers of agricultural goods.

Copyrights, trademarks, and patents are used to protect the intellectual property of a nation from foreign imitators.

The U.S.government fosters large-scale projects such as irrigation facilities in agriculture.

Unlike Germany and the United States, France has refrained from helping unemployed workers back into the labor force.

According to the strategic trade policy hypothesis, a subsidy granted to domestic exporters may lead to increased export profits, which more than offset the cost of the subsidy to domestic taxpayers.

Industrial policies of the U.S.government have included subsidizing particular firms to promote national champions, nationalizing basic industries, and encouraging cartelization of industries.

By reducing available supplies of a product, an export embargo leads to falling prices in the target nation and increasing target-nation consumer surplus.

As a way of helping U.S.business firms trade in the world market on more equal terms with their organized foreign competitors, the U.S.government permits them to form export trade associations and export trading companies.

The strategic trade policy hypothesis assumes that domestic firms operate under increasing cost conditions as well as in perfectly competitive markets.

During the post-World War II era, the United States has adopted explicit industrial policies similar to those of France and Japan.

If the U.S.government pursued a "knowledge-based growth policy," it would subsidize particular firms to help them compete in the world economy.

Intellectual property refers to holdings of rare books and pieces of art that are traded on the world market.

Industrial policy attempts to foster the development of industries that offer long-run comparative disadvantages and which are insulated from other sectors of the economy.

Under the trade adjustment assistance program, a domestic firm or worker can file for governmental assistance only if it demonstrates that it suffered economic hardship that was due to imports of foreign-subsidized goods.

Major beneficiaries of export-credit subsidies, granted by the Export-Import Bank, have included U.S.producers of aircraft, telecommunications, and power-generating equipment.