Question 1

During the past four decades:

Accepted Answer

There has been a trend towards decreasing tariffs due to various rounds of global trade negotiations, such as the Uruguay Round and the creation of the World Trade Organization. However, there has been an increase in the use of nontariff barriers, such as quotas, regulations, and technical standards, as countries seek to protect their domestic industries and address environmental and health concerns. Therefore, NTBs have increased and tariffs have decreased in importance during the past four decades.

Question 2

The most recent round of multilateral trade negotiations is the:

Accepted Answer

The Doha Round was launched in 2001 and is the most recent round of multilateral trade negotiations. The Kennedy Round took place from 1962-1967, the Tokyo Round from 1973-1979, and the Geneva Round in 1947.

Question 3

Industrial policy attempts to fulfill all of the following objectives except:

Accepted Answer

Industrial policy aims to foster industries that offer long-run comparative advantage, not disadvantage.

Question 4

In U.S.trade law,which measure permits the levying of restrictions on fairly traded imports that harm or threaten to harm American manufacturers?

Accepted Answer

The answer of In U.S.trade law,which measure permits the levying...

Question 5

In 1986 the United States enacted the Comprehensive Anti-Apartheid Act which provided for all of the following except the termination of:

Accepted Answer

The Comprehensive Anti-Apartheid Act provided for the termination of new U.S. loans to the South African government and new U.S. investment in South Africa. It also imposed comprehensive trade sanctions, including a ban on the importation of a wide range of goods from South Africa, including uranium, textiles, steel, and agricultural products. However, it did not terminate U.S. imports of South African gold coins, as gold coins were considered to be collectibles rather than trade goods.

Question 6

The average tariff rate today on dutiable imports in the United States is approximately:

Accepted Answer

The average tariff rate today on dutiable imports in the United States is approximately 5 percent of the value of imports.

Question 7

Export embargoes induce greater losses in consumer surplus for the target country:

Accepted Answer

The answer of Export embargoes induce greater losses in consumer...

Question 8

In 1990 the United States and its allies imposed trade embargoes on exports/imports to/from Iraq in response to its invasion of Kuwait.The embargoes would induce smaller losses in Iraq's consumer surplus the:

Accepted Answer

The answer of In 1990 the United States and its...

Question 9

Which international organization stipulates procedures for the settlement of international trade disputes?

Accepted Answer

The World Trade Organization (WTO) stipulates procedures for the settlement of international trade disputes. Its Dispute Settlement Body (DSB) is responsible for overseeing the dispute settlement process, which is designed to ensure that member countries abide by the rules and principles of the WTO.

Question 10

Those who argue in favor of import protection generally give the impression that such restricted trade will:

Accepted Answer

The answer of Those who argue in favor of import...

Question 11

The strongest political pressure for a trade policy that results in higher protectionism comes from:

Accepted Answer

The answer of The strongest political pressure for a trade...

Question 12

The Uruguay Round of trade negotiations was primarily concerned with:

Accepted Answer

The Uruguay Round of trade negotiations, which took place from 1986 to 1994, was primarily concerned with reducing nontariff trade barriers, such as quotas and regulatory barriers, rather than import or export tariffs. The negotiations resulted in the creation of the World Trade Organization (WTO) and the signing of the General Agreement on Tariffs and Trade (GATT) which aimed to promote freer trade and encourage economic growth.

Question 13

Suppose the president lowers tariffs on radios as the result of negotiations under the trade agreements program.Radio producers in the United States can appeal under the:

Accepted Answer

The Escape clause allows industries to appeal if rising imports substantially injure them. In this scenario, the lowering of tariffs on radios could result in increased imports of radios, potentially harming U.S. radio producers. Therefore, they could appeal under the escape clause if they experience substantial injury. The other options, B, C, and D, are not relevant in this scenario since they do not relate to the potential harm caused by increased imports of radios.

Question 14

The Uruguay Round of trade negotiations lowered:

Accepted Answer

The Uruguay Round of trade negotiations aimed to liberalize trade by reducing both tariffs and nontariff barriers. Therefore, option D is the correct choice. Option A and B are incorrect as the Uruguay Round was completed before the end of apartheid in South Africa and the Soviet Union had collapsed before the negotiations began. Option C is also incorrect as the negotiations aimed to reduce both tariffs and nontariff barriers.

Question 15

Suppose the United States imposes trade sanctions (export quotas)on grain sold to the Russians.Assuming other nations do not increase grain exports to the Russians,all of the following would occur except:

Accepted Answer

If the United States imposes trade sanctions on grain sold to the Russians, it would lead to a decrease in export revenues for U.S. producers, and grain prices would rise in Russia due to the reduced supply. Consumer surplus for the Russians would decrease since they would have to pay higher prices for the same amount of grain. However, it is not necessarily true that grain prices would rise in the United States, as domestic supply would remain the same, and the export quota may not affect domestic prices.

Question 16

The World Trade Organization provides for all of the following except:

Accepted Answer

The World Trade Organization provides for the usage of the normal-trade-relation clause, assistance in the settlement of trade disagreements, and multilateral tariff reductions, but it does not provide for bilateral tariff reductions.

Question 17

In U.S.trade law,Section 301 cases involve accusations of:

Accepted Answer

Section 301 cases involve accusations of unfair trade practices by foreign nations, which may include practices such as intellectual property theft, discriminatory or prohibitive trade policies, or other forms of trade barriers. These cases are intended to address imbalances in international trade and protect U.S. industries from unfair competition.

Question 18

In 1980 the United States announced an embargo on grain exports to the Soviet Union in response to the Soviet armed invasion of Afghanistan.The embargo was mainly resisted by:

Accepted Answer

The embargo was mainly resisted by U.S. farmers and grain companies who had been exporting significant amounts of grain to the Soviet Union. This embargo had a negative impact on their business and led to a decrease in demand for their products.

Question 19

Assume Boeing Inc. (of the United States) and Airbus Industrie (of Europe) rival for monopoly profits in the Canadian aircraft market. Suppose the two firms face identical cost and demand conditions, as seen in Figure 6.1.
Figure 6.1. Strategic Trade Policy: Boeing versus Airbus
 
-Referring to Figure 6.1,assume that Boeing is the first to enter the Canadian market.Without a governmental subsidy,the firm maximizes profits by selling ____ aircraft at a price of $____,and realizes profits totaling $____.

Accepted Answer

According to Figure 6.1, without any governmental subsidy, Boeing can sell 4 aircraft at a price of $12 million, which would result in total profits of $16 million for the firm.

Question 20

Countervailing duties may be imposed:

Accepted Answer

Countervailing duties are a type of tariff that is imposed by a government in response to a foreign export subsidy. This is done in order to level the playing field for domestic companies, and to prevent foreign companies from gaining an unfair advantage in the marketplace. In other words, countervailing duties are a way for governments to counteract the negative effects of export subsidies by foreign governments.

Quiz 6: Trade Regulations and Industrial Policies