Question 1

People who argue for lifting the U.S.trade embargo with Cuba claim all of the following EXCEPT ________.

Accepted Answer

A)  the embargo has not achieved its purpose of changing Cuba's economic and political system
B)  U.S. companies lose Cuban sales to competitors from other countries
C)  increased exposure to the United States would be a more effective force of change
D)  Cuba has largely become a market economy already

Question 2

The most common type of tariff is the export tariff.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

It is sometimes contended that by imposing import controls a country might be able to increase its exports.This contention is premised on ________.

Accepted Answer

A)  the country's simultaneous currency depreciation, which decreases the price of its exports
B)  using the import taxes to institute efficiency measures in potential export industries
C)  raising domestic prices in one industry so that the excess domestic profits in that industry can compensate for the cost of dumping products from another industry into foreign markets
D)  getting other countries to maintain or relax their current import restrictions instead of escalating restrictions in a trade war

Question 5

Countries most likely establish export restrictions to ________.

Accepted Answer

A)  ensure their population obtains the goods first
B)  raise prices in foreign markets
C)  encourage substitute products
D)  reduce domestic production

Question 6

Protectionism will most likely affect which aspect of a company's operations?

Accepted Answer

A)  selecting employees
B)  investing short-term capital
C)  acquiring foreign supplies
D)  relocating personnel overseas

Question 7

Export restrictions have a tendency to ________.

Accepted Answer

A)  favor domestic consumers
B)  protect employment in the export-restricted industries
C)  lower prices in foreign markets
D)  encourage the development of substitutes in the restricting country

Question 8

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

A) True 
 B)False

Question 9

All of the following are reasons a country might institute import restrictions to improve its balance of trade position with other countries EXCEPT to ________.

Accepted Answer

A)  maintain essential industries
B)  reduce imports and encourage exports
C)  get comparable access for its companies
D)  bargain away restrictions by other countries

Question 10

The relationship between import substitution policies and export-led development policies is best characterized by which of the following?

Accepted Answer

A)  Import-substitution policies are more likely to lead to production of mature products, whereas export-led development policies result in production of growth products.
B)  The two are hard to distinguish because production under import substitution may eventually be exported.
C)  Production under import substitution policies, as opposed to export-led development policies, is more likely to be located in urban areas.
D)  Production under import substitution policies, as opposed to export-led development policies, is likely to be more labor-intensive.

Question 11

Briefly discuss the four noneconomic rationales for governmental intervention in the free movement of trade: maintaining essential industries, preventing shipments to unfriendly countries, maintaining or extending spheres of influence, and preserving national identity.

Accepted Answer

a.Maintenance of essential industries (e...

Question 12

Country X wants to eliminate its balance of trade deficit while simultaneously keeping prices low for imported essentials.Which of the following methods would most likely achieve these dual objectives?

Accepted Answer

A)  devaluing its currency
B)  enacting selective import restrictions
C)  using tight monetary policies to deflate price levels
D)  spurring productivity increases through general tax breaks for industry

Question 13

Imports can stimulate exports by ________.

Accepted Answer

A)  redistributing the work force
B)  curtailing domestic competition
C)  generating more tax revenue
D)  increasing foreign income

Question 14

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

From an economic standpoint, comparable ...

Question 15

All of the following are generally true about trade-displaced workers EXCEPT that they ________.

Accepted Answer

A)  move abroad to take new jobs
B)  earn less in their new jobs than they earned in their old ones
C)  spend their unemployment benefits on living rather than retraining
D)  have difficulty finding new work because of educational deficiencies

Question 16

A voluntary export restriction (VER) refers to ________.

Accepted Answer

A)  an agreement between two countries to reciprocally restrict exports to one another
B)  requests by governments for companies to limit exports of militarily useful technology
C)  limiting companies' exports to increase domestic supplies
D)  limits placed on exports by a government of an exporting country at the request of the government of an importing country

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

On average, workers displaced by imports earn higher wages in the new jobs they accept.

Accepted Answer

A) True 
 B)False

Question 19

Why should managers have an understanding of trade protectionism?

Accepted Answer

A)  Trade protectionism targets factor endowments, thus affecting the best country to locate production.
B)  Trade protectionism affects a company's ability to sell abroad and ability to compete at home.
C)  Trade protectionism affects the number of people permitted to practice a specific profession.
D)  Trade protectionism prevents companies' enactment of merger and acquisition agreements.

Question 20

Country X is withholding goods from international markets in an attempt to raise prices abroad.Such actions will be most effective for Country X if the nation ________.

Accepted Answer

A)  supports the development of substitutions
B)  provides domestic industries with tax breaks
C)  receives low-interest loans from foreign banks
D)  holds a monopoly on the product or resource

Exam 7: Governmental Influence on Trade

A voluntary export restriction (VER) refers to ________.

Correct AnswerverifiedShow Answer

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."

Correct AnswerverifiedFrom an economic standpoint, comparable ...View AnswerShow Answer

All of the following are reasons a country might institute import restrictions to improve its balance of trade position with other countries EXCEPT to ________.

Correct AnswerverifiedShow Answer

Export restrictions have a tendency to ________.

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

Country X wants to eliminate its balance of trade deficit while simultaneously keeping prices low for imported essentials.Which of the following methods would most likely achieve these dual objectives?

Correct AnswerverifiedShow Answer

On average, workers displaced by imports earn higher wages in the new jobs they accept.

Correct AnswerverifiedShow Answer

Imports can stimulate exports by ________.

Correct AnswerverifiedShow Answer

Why should managers have an understanding of trade protectionism?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

People who argue for lifting the U.S.trade embargo with Cuba claim all of the following EXCEPT ________.

Correct AnswerverifiedShow Answer

The relationship between import substitution policies and export-led development policies is best characterized by which of the following?

Correct AnswerverifiedShow Answer

Country X is withholding goods from international markets in an attempt to raise prices abroad.Such actions will be most effective for Country X if the nation ________.

Correct AnswerverifiedShow Answer

The most common type of tariff is the export tariff.

Correct AnswerverifiedShow Answer

Countries most likely establish export restrictions to ________.

Correct AnswerverifiedShow Answer

It is sometimes contended that by imposing import controls a country might be able to increase its exports.This contention is premised on ________.

Correct AnswerverifiedShow Answer

Briefly discuss the four noneconomic rationales for governmental intervention in the free movement of trade: maintaining essential industries, preventing shipments to unfriendly countries, maintaining or extending spheres of influence, and preserving national identity.

Correct Answerverifieda.Maintenance of essential industries (e...View AnswerShow Answer

All of the following are generally true about trade-displaced workers EXCEPT that they ________.

Correct AnswerverifiedShow Answer

Protectionism will most likely affect which aspect of a company's operations?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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From an economic standpoint, comparable ...
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a.Maintenance of essential industries (e...
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