Question 1

Arguments for the government imposing restrictions on foreign trade include

Accepted Answer

The government may need to restrict foreign trade to protect the health of its citizens, particularly if products or imports may potentially pose a risk to public health or safety. Examples include restrictions on the importation of certain foods or agricultural products that may contain harmful substances or disease-causing organisms. Other examples may include restrictions on the importation of certain pharmaceuticals or medical devices that have not been approved by domestic regulatory agencies for safety and efficacy.

Question 2

The Kingdom of Rhonda has no high tariffs, yet other countries find it difficult to trade with the Kingdom of Rhonda because of its requirements for labeling, product testing, and certification.These restrictions can best be classified as _____.

Accepted Answer

The term "bureaucratic red tape" refers to excessive regulations and procedures that make it difficult for businesses to operate or trade with a country, despite the absence of high tariffs or other trade barriers. This accurately describes the situation in the Kingdom of Rhonda. The other options - embargos, currency devaluations, import quotas, and quality import restrictions - do not accurately describe the situation.

Question 3

Howard believes that there should be no trade restrictions for any reason.What effect would Howard say that trade restrictions have on prices?

Accepted Answer

Howard believes that trade restrictions reduce competition, which in turn causes an increase in prices. When there are fewer suppliers in the market, they have more power to set prices as demand for goods may still exist. Therefore, with trade restrictions limiting the number of suppliers, prices will likely increase due to reduced competition.

Question 4

Alberto complained that it took some time to locate a distributor of an imported light bulb that he had to replace.He was further annoyed that he had to pay an artificially high price.When asked for his opinion, Alberto would probably argue

Accepted Answer

Alberto's frustration with locating a distributor and paying an artificially high price indicates that he believes in having access to a variety of products from different countries, which would be restricted by trade barriers. Therefore, he would likely argue against trade restrictions.

Question 5

The United States does not sell fighter jets, such as F-16s, to Libya.The rationale for this restriction is most likely to

Accepted Answer

The restriction on selling fighter jets to Libya is most likely to protect national security. Libya has been known to have ties to terrorist groups and selling fighter jets to them could potentially pose a threat to US national security.

Question 6

Taiwanese manufacturers are dumping toys in Germany.What will happen to German toy manufacturers if the German government allows this dumping to continue?

Accepted Answer

If the German government allows Taiwanese manufacturers to continue dumping toys, German toy manufacturers will find it difficult to compete with the low prices offered by the Taiwanese. This could result in German toy manufacturers going out of business as they will not be able to compete with the low prices, leading to a decrease in revenues and ultimately, possible closure.

Question 7

Suppose a set of English bone china costing 1,000 pounds costs $3,000 in the United States.After devaluation, the set of china costs $1,000.This change

Accepted Answer

After devaluation, the set of china now costs $1,000, which is equivalent to around 770 pounds (assuming an exchange rate of 1 USD to 0.77 GBP). This means that the price of the china has decreased for foreign purchasers, making it more attractive to them. Option A is incorrect as the price has actually decreased for foreign purchasers. Option B is incorrect as there is no evidence to suggest that the china is now less attractive to foreign purchasers. Option D is incorrect as the devaluation does have an impact on foreign purchasers. Option E is not relevant as it is not a logical conclusion based on the information given.

Question 8

A restriction on the amount of a particular foreign currency that can be purchased or sold is a _____.

Accepted Answer

A restriction on the amount of a particular foreign currency that can be purchased or sold is known as foreign-exchange control. Monetary export control refers to controlling the export of money from a country, nontariff barrier refers to any trade barrier that is not a tariff, currency devaluation refers to reducing the value of a country's currency in relation to other currencies, and currency control is a vague term that can refer to various measures implemented by a country to regulate its currency.

Question 9

The United States bans Cuban cigars and other Cuban products from entering the United States due to political difficulties.This action is called a(n) _____.

Accepted Answer

An embargo is a government order that restricts commerce or trade with another country, typically as a punitive measure or a means of exerting political pressure. In this case, the United States has placed an embargo on Cuban products, including Cuban cigars, due to political difficulties with Cuba.

Question 10

In addition to political considerations, which of the following are reasons for trade restrictions?

Accepted Answer

All of the reasons listed (equalizing balance of payments, protecting new and weak industries, protecting health of citizens, and protecting national security) are commonly cited justifications for trade restrictions.

Question 11

Despite trade restrictions, international business is

Accepted Answer

Despite trade restrictions, international business is still growing. This is evident from the increasing volume of international trade and investments, and the rise of multinational corporations operating in multiple countries. While trade restrictions may pose challenges to certain industries and countries, overall global business is continuing to expand.

Question 12

American automakers are concerned about the availability of so many foreign cars to U.S.consumers, and that their chances to sell their own cars are limited.To correct the situation, they encourage Congress to impose a(n) _____.

Accepted Answer

The best choice would be to impose an import quota, limiting the number of foreign cars that can be imported into the US market. This would protect the domestic automakers and give them a better chance to sell their own cars. The other options (export quota, export duty, tariff, import duty) would not directly address the issue of too many foreign cars being available to US consumers.

Question 13

The Saudi Arabian government does not allow the consumption of alcoholic beverages within its country.The Saudi Arabian government is imposing a(n) _____.

Accepted Answer

The answer of The Saudi Arabian government does not allow...

Question 14

A currency devaluation increases the cost of foreign goods and ____ the cost of domestic goods to foreign firms.

Accepted Answer

A currency devaluation decreases the value of a currency in relation to other currencies, making imports more expensive. It also makes exports cheaper for foreign firms, as they can purchase more goods with their currency. Therefore, the cost of domestic goods to foreign firms decreases.

Question 15

Because it has not been around long enough to establish itself, the Russian automobile industry could be classified as a(n) _____.

Accepted Answer

The term "infant industry" refers to a new industry that has not yet established itself and requires protection and support from the government to grow and develop. The Russian automobile industry fits this description as it is relatively new and has not yet fully established itself in the global market.

Question 16

During a stormy meeting of computer software firms, several company presidents said that without tariff cushions, many of them would go broke.They represent a new industry that needs protection until their firms grow to a size that will allow them to be competitive.Their comments are based on the

Accepted Answer

The statement made by the company presidents is based on the infant-industry argument, which proposes that new and developing industries need protection through tariffs, subsidies, and other government interventions until they are mature enough to compete with established industries in the global market. The argument is that without such protection, the infant industry may not survive the competition and go out of business. This argument is often used by industries that are still in the early stages of development, such as the computer software firms in this scenario.

Question 17

The United States wants to limit the amount of dollars that another country can obtain.The best way to accomplish this is to

Accepted Answer

The best way to limit the amount of dollars that another country can obtain is to establish a foreign-exchange control, which involves regulating the conversion of that country's currency into dollars through a system of permits or licenses. This allows the government to control the volume of dollars going into the foreign market and ensures that the amount of dollars entering the country is restricted. The other options listed do not necessarily restrict the amount of dollars obtained by the foreign country.

Question 18

At present, the United States has an embargo against North Korea because

Accepted Answer

The United States has an embargo against North Korea because the two countries have extremely poor political relations. This embargo was initially imposed in 1950 and has been continuously renewed due to North Korea's nuclear weapons program and human rights abuses.

Question 19

A reduction in the value of a nation's currency relative to the currencies of other countries is called _____.

Accepted Answer

A reduction in the value of a nation's currency relative to other countries' currencies is called currency devaluation. This can happen due to various reasons such as a decrease in the demand for the currency, high inflation rates, or a decline in the country's economic performance.

Question 20

Arguments for imposing trade restrictions include

Accepted Answer

The answer of Arguments for imposing trade restrictions include
...

Quiz 3: Exploring Global Business