Question 1

An international conference in Bretton Woods, New Hampshire, in 1944
Resulted in the formation of:
A)the European Union in 1945.
B)the Kyoto Agreement in 1971.
C)the General Agreement on Tariffs and Trade (GATT) in 1947.
D)the International Red Cross in 1955.

Accepted Answer

The Bretton Woods conference resulted in the creation of the International Monetary Fund and the World Bank, but it also laid the groundwork for the General Agreement on Tariffs and Trade (GATT), which eventually became the World Trade Organization (WTO).

Question 2

What is the MOST recent set of negotiations at WTO called?
A)the Doha round
B)the Kyoto round
C)the Geneva accord
D)the Paris negotiation

Accepted Answer

The most recent set of negotiations at WTO is called the Doha round, which started in 2001 in Doha, Qatar.

Question 3

GATT is the acronym (or abbreviation) for:
A)the General Agreement on Taxes and Tariffs.
B)the General Agreement on Tariffs and Trade.
C)the General Agreement on Trade and Taxes.
D)the General Agreement on Trade.

Accepted Answer

GATT stands for General Agreement on Tariffs and Trade. It was an international agreement signed in 1947 with the goal of reducing trade barriers and promoting international trade. It was later replaced by the World Trade Organization (WTO) in 1995.

Question 4

Import tariffs are ___________ on imports, and import quotas are
____________ on imports.
A)subsidies; taxes
B)limits; subsidies
C)taxes; limits
D)limits; taxes

Accepted Answer

Import tariffs are taxes imposed on imports, while import quotas are limits set on the quantity of imports.

Question 5

The safeguard provision or escape clause allows a country to:
A)import products below cost from foreign countries.
B)export products by selling below cost to foreign countries.
C)avoid tariffs in foreign countries temporarily.
D)temporarily increase tariffs on certain imported goods.

Accepted Answer

The safeguard provision or escape clause allows a country to temporarily increase tariffs on certain imported goods in order to protect its domestic industries from severe injury caused by a surge in imports. This provision is allowed under the World Trade Organization rules but must be used only under certain conditions and subject to certain procedures.

Question 6

The escape clause in U.S.trade law:
A)enables the United States to withdraw from NAFTA.
B)permits the U.S.government to impose trade barriers if fairly traded imports are the cause of significant injury to a U.S.industry and its
Workers.
C)permits the government to impose trade remedies against nations that unfairly subsidize their exports to the United States.
D)enables immigrants to return to their home countries.

Accepted Answer

The answer of The escape clause in U.S.trade law:
A)enables the...

Question 7

Which of the following is an exception to the most favored nation
Principle?
A)trade in petroleum
B)trade with Japan
C)tariff concessions negotiated within a free­trade area or a customs union
D)trade in services

Accepted Answer

Tariff concessions negotiated within a free-trade area or a customs union are an exception to the most favored nation principle because they involve trade agreements between a group of countries rather than a single country. Under these agreements, participating countries agree to grant each other preferential treatment and lower tariffs on certain goods, which is not extended to non-participating countries. This allows for greater trade integration and economic cooperation among the participating nations.

Question 8

What GATT provision did the United States use to justify levying tariffs on
Tire imports in fall 2009?
A)antidumping duties
B)export subsidization
C)safeguard clause
D)national security

Accepted Answer

The safeguard clause provision allowed the United States to impose tariffs on tire imports in a effort to protect the domestic tire industry from a surge in imports.

Question 9

Which organization acts as a forum for countries to come to agreement on
Trade policies and resolve trade policy disputes?
A)the International Trade Organization
B)the United Nations
C)the World Trade Organization
D)the United Nations Conference on Trade and Development

Accepted Answer

The World Trade Organization (WTO) acts as a forum for countries to come to an agreement on trade policies and resolve trade policy disputes. It replaced the International Trade Organization (ITO) in 1995 and is currently composed of 164 member countries. The WTO's main objective is to ensure free and fair trade between member countries by facilitating negotiations and monitoring trade policies.

Question 10

To help its domestic producers, the United States unilaterally raised tariffs
On ____ in early 2002, but after a ruling against the United States by the
WTO, it was forced to rescind the tariff.
A)autos
B)steel
C)oil
D)dairy products

Accepted Answer

The passage clearly states that the United States raised tariffs to help its domestic producers, and then was forced to rescind the tariff after a ruling against the United States by the WTO. The only product mentioned as having a tariff increase is steel, so the answer is B)steel.

Question 11

The General Agreement on Tariffs and Trade focused on:
A)raising tariffs on agricultural products.
B)lowering trade restrictions between countries.
C)promoting full employment worldwide.
D)increasing trade restrictions between countries.

Accepted Answer

The General Agreement on Tariffs and Trade was created to lower trade restrictions and promote free trade between countries. Its goal was to reduce tariffs and to eliminate other barriers to international trade.

Question 12

Under the WTO provision of Article XIX, countries can:
A)never charge a tariff on an import.
B)always charge a tariff on imports.
C)temporarily charge a higher tariff on certain commodities.
D)provide subsidies to all domestic producers of import competing products.

Accepted Answer

Under Article XIX of the WTO, countries can impose a temporary tariff increase to protect a domestic industry that is being affected by imports causing serious injury. This is known as a safeguard measure and is subject to certain conditions and limitations. Option A is incorrect as countries can charge tariffs on imports within certain limits. Option B is incorrect as there are restrictions on the amount of tariffs that can be charged. Option D is incorrect as subsidies to domestic producers are subject to specific rules under the WTO.

Question 13

WTO is the acronym for:
A)the World Traffic Organization.
B)the World Trade Organization.
C)the World Tariff Organization.
D)the World Tax Organization.

Accepted Answer

WTO stands for World Trade Organization, which is an intergovernmental organization that regulates international trade between nations. It was established in 1995 and is headquartered in Geneva, Switzerland. Its main function is to ensure that trade flows as smoothly, predictably, and freely as possible.

Question 14

Under the GATT framework, nations negotiated for up to six years,
Resulting in new trade agreements.These are known as:
A)conferee sessions.
B)plenary meetings.
C)sesqui­sessions.
D)rounds.

Accepted Answer

The negotiations under the GATT framework were referred to as rounds, and resulted in new trade agreements being reached among nations after up to six years of negotiation.

Question 15

The United States recently levied tariffs on tires imported from what
Country?
A)Japan
B)Brazil
C)Russia
D)China

Accepted Answer

The United States recently levied tariffs on tires imported from China, as a part of their ongoing trade dispute.

Question 16

What organization emerged from the GATT, starting January 1, 1995, with
Expanded responsibilities and global interaction?
A)the Doha round
B)the World Trade Organization
C)the United Nations
D)the Institute for International Economics

Accepted Answer

The World Trade Organization (WTO) emerged from the General Agreement on Tariffs and Trade (GATT) on January 1, 1995. The WTO has expanded responsibilities and interacts globally, overseeing rules governing international trade and resolving disputes between member countries. The Doha Round refers to a series of negotiations conducted by WTO members from 2001 to 2015 aimed at achieving further global trade liberalization. The United Nations is a separate organization focused on promoting international cooperation and peacekeeping, and the Institute for International Economics is a non-profit research organization focused on economic policy.

Question 17

What is an "export subsidy"?
A)a payment by one government to another for exports
B)a payment (or other benefit) to domestic firms by their government to help them sell exports more cheaply
C)the rule that says all exports must be taxed before they leave the port
D)a provision that exporters must get their payments indirectly through a third party

Accepted Answer

An export subsidy is a form of financial assistance given to domestic firms by their government in order to help them sell their products in foreign markets at a lower price. This is typically done by directly providing funds or other benefits to exporters, or through measures like tax exemptions or rebates on inputs used for export production. The goal of such subsidies is to increase the competitiveness of domestic firms in global markets and boost the country's overall export performance. However, they can also distort trade flows, artificially inflate prices, and lead to inefficiencies in the domestic economy.

Question 18

GATT maintained a provision that nations could enact temporary
Emergency tariffs or quotas if imports threatened the existence of
Domestic producers.The WTO has not struck that provision.Economists
Call this:
A)the tariff bill.
B)the escape clause.
C)justifiable means.
D)domestic job security provision.

Accepted Answer

The provision mentioned in the question is commonly known as the "escape clause", which allows nations to impose temporary tariffs or quotas to protect domestic industries from import surges or other forms of unfair competition. The other choices are not accurate descriptions of this provision.

Question 19

One feature of the GATT and now the WTO is that all member nations get
The same treatment from their trading partners in terms of trade rules and
Restrictions.This provision is called:
A)beggar thy neighbor.
B)the good neighbor policy.
C)rotating obligations.
D)most favored nation status.

Accepted Answer

Most favored nation status means that all member nations of the WTO receive the same treatment and concessions from other member nations, which helps to promote free trade and reduce discrimination in international trade.

Question 20

Most favored nation status requires:
A)a WTO member that reduces a tariff on imports from one WTO trading partner to apply the lower tariff to imports from all other WTO members.
B)a WTO member that reduces a tariff on imports from one WTO trading partner to apply the lower tariff to imports from all other countries.
C)a WTO member that increases a tariff on imports from one WTO trading partner to raise the tariff on imports from all other WTO members.
D)a WTO member that increases a tariff on imports from one WTO trading partner to raise the tariff on imports from all other countries.

Accepted Answer

Most favored nation status is a principle of the World Trade Organization (WTO) that requires a member country to extend the same trade benefits and concessions to all other WTO member countries that it extends to any one of them. Therefore, if a WTO member reduces a tariff on imports from one WTO trading partner, it must apply the same lower tariff to imports from all other WTO members. Option A reflects this principle.

Quiz 8: Import Tariffs and Quotas Under Imperfect Competition

An international conference in Bretton Woods, New Hampshire, in 1944 Resulted in the formation of:

What is the MOST recent set of negotiations at WTO called?

GATT is the acronym (or abbreviation) for:

Import tariffs are _ on imports, and import quotas are __ on imports.

The safeguard provision or escape clause allows a country to:

The escape clause in U.S.trade law:

Which of the following is an exception to the most favored nation Principle?

What GATT provision did the United States use to justify levying tariffs on Tire imports in fall 2009?

Which organization acts as a forum for countries to come to agreement on Trade policies and resolve trade policy disputes?

To help its domestic producers, the United States unilaterally raised tariffs On ____ in early 2002, but after a ruling against the United States by the WTO, it was forced to rescind the tariff.

The General Agreement on Tariffs and Trade focused on:

Under the WTO provision of Article XIX, countries can:

WTO is the acronym for:

Under the GATT framework, nations negotiated for up to six years, Resulting in new trade agreements.These are known as:

The United States recently levied tariffs on tires imported from what Country?

What organization emerged from the GATT, starting January 1, 1995, with Expanded responsibilities and global interaction?

What is an "export subsidy"?

GATT maintained a provision that nations could enact temporary Emergency tariffs or quotas if imports threatened the existence of Domestic producers.The WTO has not struck that provision.Economists Call this:

One feature of the GATT and now the WTO is that all member nations get The same treatment from their trading partners in terms of trade rules and Restrictions.This provision is called:

Most favored nation status requires: