Question 1

The World Bank successfully met its goal of aiding the reconstruction of Europe but has been less successful in furthering the economic goals of the developing world and the newly emerging market economies in the former Soviet bloc.

Accepted Answer

This statement is true. The World Bank's main focus in the years following its creation in 1944 was on European reconstruction, and it was successful in achieving this goal. However, in more recent years, the bank has faced criticism for its effectiveness in promoting economic development in developing countries and the former Soviet bloc.

Question 2

________ legislation is a trade policy that restricts trade to or from one country to another country.
A)Intellectual rights
B)Protectionist
C)Export
D)Free trade
E)Restricted trade

Accepted Answer

Protectionist legislation is a trade policy that includes measures such as tariffs, quotas, and subsidies to protect domestic industries from foreign competition. It restricts trade to or from one country to another country.

Question 3

The IMF is an international financial institution that deals with balance of payment issues on an international level.

Accepted Answer

The International Monetary Fund (IMF) is indeed an international organization that focuses on international monetary cooperation, exchange rate stability, and promotion of international trade. Its primary objective is to ensure the stability of the international monetary system—the system of exchange rates and international payments that enable countries to transact with each other.

Question 4

Retaliatory tariffs are a tax on an imported good or service intended to punish a trading partner.

Accepted Answer

The answer of Retaliatory tariffs are a tax on an...

Question 5

____________ negotiations are carried out between two nations focusing only on their own interests.
A)Unilateral
B)Multilateral
C)Polylateral
D)Bilateral
E)Restrained

Accepted Answer

Bilateral negotiations are characterized by being carried out between two parties, usually states or governments, and focus only on their individual interests.

Question 6

Bound tariffs are those duties that are actually levied by a country.

Accepted Answer

Bound tariffs are the duty rates committed by countries in international trade agreements, not necessarily the rates actually levied, which can be lower.

Question 7

National sovereignty is the area of public policy concerned with other countries.

Accepted Answer

National sovereignty refers to the authority of a state to govern itself without external interference, not specifically to policies concerning other countries.

Question 8

__________ gives Congress the right to accept or reject trade treaties and agreements,but reduces the amendment procedures.
A)Trade restriction right
B)Bilateral negotiating
C)Right-to-purchase
D)Negotiating authority
E)Trade promotion authority

Accepted Answer

Trade Promotion Authority (TPA), also known as "fast-track authority," gives Congress the ability to approve or disapprove of trade agreements negotiated by the President, but significantly limits the amendment process. Under TPA, Congress can only vote on the agreement as a whole, without offering any amendments. TPA is designed to facilitate the negotiation of trade agreements by providing assurances to foreign negotiating partners that the final agreement will not be altered during the approval process.

Question 9

By encouraging that imported products are sold at low prices,antidumping laws are designed to help companies from abroad that are competing within a domestic country.

Accepted Answer

Antidumping laws are designed to protect domestic companies from being harmed by foreign competitors who are selling products at unfairly low prices, often through the use of subsidies or other unfair advantages. These laws impose tariffs or other penalties on the imported products to level the playing field and prevent domestic companies from being driven out of business.

Question 10

Industrial dominance and technological dependence are negative impacts of foreign direct investment.

Accepted Answer

Industrial dominance refers to a situation in which foreign companies dominate the local market and squeeze out local businesses. Technological dependence occurs when the host country relies too heavily on technology transferred from foreign multinational firms rather than building its own technological capacity. Both of these can have negative impacts on the host country's economy and development.

Question 11

Capital flight is the movement of currency from nation to nation,which in turn determines exchange rates.

Accepted Answer

Capital flight refers to the large-scale exodus of financial assets and capital from a nation due to economic or political instability, not the movement of currency that determines exchange rates. Exchange rates are influenced by a variety of factors including interest rates, inflation, and economic indicators, not just capital flight.

Question 12

The government of Estonia recently announced that it would offer guaranteed government purchases,special protection from competition,and improved infrastructure facilities to foreign companies that would establish operations in Estonia. What types of incentives are being offered by the government?
A)Fiscal
B)Financial
C)Nonfinancial
D)Tariff
E)Bartering

Accepted Answer

The incentives being offered by the government of Estonia are nonfinancial in nature, as they do not involve any direct financial benefits or subsidies. The incentives include guaranteed government purchases, special protection from competition, and improved infrastructure facilities, which are designed to create a favorable business environment for foreign companies. The other options (A, B, D, E) are not applicable, as they refer to different types of incentives that involve fiscal or financial measures, tariffs, or bartering.

Question 13

All nations have international trade and investment policies.

Accepted Answer

All nations have international trade and investment policies as they engage in economic transactions with other countries. These policies may vary based on factors such as the country's economic goals, resources, and political relations with other nations.

Question 14

Buy-domestic campaigns,preferential treatment for domestic bidders,and restrictions on market entry of foreign products such as heightened inspection procedures are all examples of nontariff barriers.

Accepted Answer

These are all examples of nontariff barriers, which are measures taken by a government to restrict imports without using tariffs or other direct trade barriers.

Question 15

The legal right resulting from industrial,scientific,literary,or artistic activity is referred to as:
A)Intellectual property rights
B)Individual property rights
C)Copyrighting
D)Knowledge transfer
E)Brain drain

Accepted Answer

Intellectual property rights refer to the legal rights resulting from industrial, scientific, literary, or artistic activity. These rights include copyrights, patents, trademarks, and trade secrets.

Question 16

Mixed aid credits are composed partially of commercial interest rates and partially of highly subsidized developmental aid interest rates.

Accepted Answer

Mixed aid credits are designed to combine both commercial interest rates and subsidized developmental aid interest rates in order to provide financial assistance to developing countries while also encouraging private investment. The exact composition of the interest rates may vary depending on the specific program or lender, but the basic premise is that a portion of the loan will carry a market-based interest rate (similar to a traditional commercial loan) and a portion will carry a very low, concessionary rate that is meant to promote development objectives.

Question 17

Due to disagreements among sponsoring nations,the provisions of the General Agreement on Tariffs and Trade were never ratified.

Accepted Answer

This statement is incorrect. The General Agreement on Tariffs and Trade was ratified and became effective in 1948. It was succeeded by the World Trade Organization in 1995. While there were disagreements among sponsoring nations at times during its existence, this did not prevent its ratification.

Question 18

The WTO supplanted GATT in 1995 to administer international trade and investment accords.

Accepted Answer

This statement is true. The World Trade Organization (WTO) was established on January 1, 1995, and replaced the General Agreement on Tariffs and Trade (GATT) as the global organization responsible for regulating international trade and investment agreements.

Question 19

The Committee on Foreign Investments in the United States is charged with enhancing foreign trade and making sure that all major foreign investment deals go through.

Accepted Answer

The Committee on Foreign Investments in the United States is actually responsible for reviewing and potentially blocking foreign investments that may pose national security risks. While it does consider the economic impact of these deals, its primary focus is on national security concerns.

Question 20

American voters often associate measures that restrict trade with domestic manufacturers closing factories and cutting jobs.

Accepted Answer

The answer of American voters often associate measures that restrict...

Quiz 2: Trade and Investment