Question 1

Every time countries enter a new trading agreement,service trade tends to grow more rapidly than merchandise trade.

Accepted Answer

The answer of Every time countries enter a new trading...

Question 2

A quota is a quantitative limit on the amount of a product that can be traded.

Accepted Answer

A quota is a quantitative limit on the amount of a product that can be traded, making statement A true.

Question 3

What are the disadvantages of import restrictions in regards to creating domestic employment opportunities?

Accepted Answer

The answer of What are the disadvantages of import restrictions...

Question 4

The purpose of "Made in" labels on imported products is to enable countries to keep records of the origin of imports.

Accepted Answer

The primary purpose of "Made in" labels is to inform consumers about the country of origin of a product, which can influence purchasing decisions based on perceptions of quality, support for domestic industries, or concerns about environmental and labor practices.

Question 5

Many companies and industries argue that they should have the same access to foreign markets as foreign industries and companies have to their markets. In a short essay,discuss this issue of "comparable access" or "fairness."

Accepted Answer

The answer of Many companies and industries argue that they...

Question 6

When customs officials set a value on which to place an import tariff,they ordinarily use the declared invoice price unless they doubt its authenticity.

Accepted Answer

Customs officials usually use the declared invoice price for setting import tariff, unless they question its credibility.

Question 7

Agricultural subsidies by developed countries impede the competitiveness of agricultural exports by developing countries.

Accepted Answer

Developed countries provide subsidies to their agricultural sectors which can lead to overproduction and a surplus of exportable goods. This surplus can be sold at lower prices than those offered by developing countries, making it difficult for the latter to compete in international markets. Therefore, agricultural subsidies by developed countries can impede the competitiveness of agricultural exports by developing countries.

Question 8

An effective tariff is the sum of the ad valorem tariff plus the specific duty.

Accepted Answer

An effective tariff is a measure of the total cost of tariffs, including both ad valorem (percentage of value) and specific duties (fixed amount per unit), but it is not simply their sum. It is calculated to assess the combined effect on the price of an imported good.

Question 9

Explain the rationale for and problems with making the infant-industry argument work as intended.

Accepted Answer

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Question 10

At present there is little reciprocal recognition of professional licensing among countries.

Accepted Answer

Currently, there is no universal system for professional licensing and each country has its own requirements and standards for licensing. As a result, there is often little recognition of professional licenses across borders.

Question 11

The most common type of tariff is the export tariff.

Accepted Answer

The most common type of tariff is actually the import tariff, not the export tariff. An import tariff is a tax imposed by a government on goods imported into a country. An export tariff, on the other hand, is a tax imposed by a government on goods exported out of a country. Export tariffs are less common than import tariffs, as governments typically want to encourage exports to promote economic growth.

Question 12

The essential-industry argument holds that industries with potential export capabilities should be protected.

Accepted Answer

The essential-industry argument for protectionism is based on the idea that certain industries are vital for national security and should be protected, not necessarily because of their export capabilities.

Question 13

What is the difference between import substitution policies and export-led development policies? What are the potential effects of each?

Accepted Answer

The answer of What is the difference between import substitution...

Question 14

The international regulatory situation for trade is becoming more,rather than less,complex.

Accepted Answer

The statement suggests that the regulatory situation for trade is becoming increasingly complex, indicating that it is true.

Question 15

Companies that have integrated their supply chains internationally tend to lobby their home governments for increased protectionist measures.

Accepted Answer

Companies that have integrated their supply chains internationally often have a vested interest in free trade and are less likely to lobby for protectionist measures that could disrupt their global operations.

Question 16

Why do developing countries sometimes impose import restrictions to increase their levels of industrialization?

Accepted Answer

The answer of Why do developing countries sometimes impose import...

Question 17

Import trade controls,but not export trade controls,can be used as a weapon of foreign policy.

Accepted Answer

Both import and export trade controls can be used as weapons of foreign policy, as they can influence other countries' economies and political decisions by restricting access to markets or resources.

Question 18

Home country consumers are typically active in preventing their domestic companies from dumping products into foreign markets.

Accepted Answer

Home-country consumers generally do not play a significant role in preventing their domestic companies from dumping products into foreign markets, as their primary concern often lies with obtaining products at lower prices, rather than the international trade practices of these companies.

Question 19

When a company is seeking protection from imports,it can usually improve its chances of getting that protection if it allies with most of the companies in the industry.

Accepted Answer

When a company forms an alliance with most of the companies in the industry, it shows that the industry as a whole is facing a threat from imports and not just one individual company. This increases the chances of getting protection from imports.

Question 20

Governments sometimes prohibit operations of private companies,foreign or domestic,in some sectors because they feel these services should not be sold at a profit.

Accepted Answer

Some governments may feel that certain industries or services should be provided as a public good rather than being driven by profit motives, and may therefore prohibit private companies from operating in those sectors.

Quiz 7: Governmental Influence on Trade