1. Which of the following is not one of the main instruments of trade policy?a. Credit portfoliosb. Administrative policiesc. Local content requirementsd. Tariffs

2. After the Uruguay Round of GATT extended global trading rules to cover trade in services, the first two industries targeted for reform by the WTO werea. Telecommunications and financial servicesb. Automotives and aerospacec. Textiles and technologyd. Agriculture and consulting services

3. Identify the incorrect statement pertaining to trade barriers.a. They raise the costs of exporting products to a countryb. To conform to local content regulations, a firm may have to locate more

production activities in a given market than it would otherwisec. They may put a firm at a competitive advantage to indigenous competitorsd. They may limit a firm's ability to serve a country from locations outside

of that country

4. In the 1986 Uruguay Round, GATT members sought to write rules for promoting all of the following excepta. Agricultural subsidiesb. GATT's monitoring and enforcement mechanismsc. GATT rules to cover trade in servicesd. Intellectual property protection

5. This is levied as a proportion of the value of the imported good.a. Ad valorem tariffb. Specific tariffc. Special tariffd. Tariff quota

6. Foreign producers typically agree to voluntary export restrictions becausea. They fear far more damaging punitive tariffs or import quotas might

follow if they do notb. Their manufacturing capacity is limitedc. They can divert their exports to other countries and charge more for their

productsd. They are required to by the World Trade Organization

7. _____ has occurred when foreign goods are being sold cheaper than at home or below their cost of production.a. Production efficiencyb. Market saturation

c. Dumpingd. Price elasticity

8. The EU's Common Agricultural Policy is an example of a tax policy designed toa. Benefit consumersb. Benefit taxpayersc. Benefit special interest politicsd. Benefit free trade in a developed country

9. _____ suggests that a government should use subsidies to support promising firms that are active in newly emerging industries.a. The national security argumentb. The infant industry argumentc. Strategic trade policyd. Retaliation policy

10.A common hybrid of a quota and a tariff is known as aa. Tariff rate quotab. Quota rentc. Ad valorem tariffd. Voluntary export restraint

11.The _____ specifies that government agencies must give preference to American products when putting contracts for equipment out to bid unless the foreign products have a significant price advantage.a. D'Amato Actb. Anti-Dumping Actc. Helms-Burton Actd. Buy America Act

12.According to the _____ policy, subsidies can help a firm achieve a first-mover advantage in an emerging industry.a. Free tradeb. Antidumpingc. Strategic traded. Tariff quota

13.According to the _____ argument, governments should temporarily support new industries until they have grown strong enough to meet international competition.a. Retaliatory actionb. Anti-dumpingc. Infant industryd. Human rights

14.Administrative trade policies area. Designed to punish foreign firms that engage in dumpingb. Bureaucratic rules designed to make it difficult for imports to enter a

countryc. Quotas on trade imposed by the exporting countryd. Requirements that some specific fraction of a good be produced domestically

15.These are requirements that some specific fraction of a good be produced domestically.a. Antidumping dutiesb. Local content requirementsc. Import quotasd. Voluntary export restraints

16.All of the following are true of tariffs, excepta. They reduce the revenue for the governmentb. They can be levied as a proportion of the value of the imported goodc. They impose significant costs on domestic consumersd. They can be levied as a fixed charge for each unit of a good imported

17.Which of the following is not a reason why WTO is being criticized by those opposing free trade?a. The adverse impact that some of its rulings have had on environmental

policiesb. Its trade laws allow imports from low-wage countries and result in a loss of

jobs in high-wage countriesc. Its rules outlawing the ability of nations to stop imports from countries where

working conditions are hazardousd. Its lack of ability to force any member nation to take an action to which

it is opposed.

18.The WTO argues that by removing all tariff barriers and subsidies to agriculture all of the following would occur, excepta. There would be overproduction of products that are heavily subsidizedb. Global economic growth would risec. The overall level of trade would increased. Prices would fall for consumers

19.Economic problems during the Great Depression were compounded in 1930 when the U.S. Congress passed the _____, aimed at avoiding rising unemployment by protecting domestic industries and diverting consumer demand away from foreign products.a. Antib. Helmsc. Smoot

d. D'Amato Act20._____ are the highest rate that can be charged, which is often, but not always,

the rate that is charged.a. Tariff rentsb. Specific tariff ratesc. Ad valorem tariff ratesd. Bound tariff rates

21.Until 1995, GATT rules applied to all of the following, excepta. Servicesb. Textilesc. Manufactured goodsd. Agricultural products

22.The Millennium Round ended in 1999 witha. A new agenda for the next round focusing on financial servicesb. No agreement on the reduction of barriers to cross-border trade in

agricultural products and trade and investment in servicesc. A decision to avoid FDId. A successful record on agricultural products

23.Tariffs do not benefita. Governmentsb. Consumersc. Domestic firmsd. Domestic producers

24.Specific tariffs area. Government payment to domestic producersb. In the form of manufacturing or production requirements of goods.c. Levied as a fixed charge for each unit of a good importedd. Levied as a proportion of the value of the imported good

25.Antidumping duties are often calleda. Special circumstance dutiesb. Positive dutiesc. Countervailing dutiesd. Retroactive duties

26._____ argues that a strategic trade policy aimed at establishing domestic firms in a dominant position in a global industry is a beggar-thy-neighbor policy that boosts national income at the expense of other countries.a. Michael Porterb. Paul Krugmanc. David Ricardod. Adam Smith

27.A quota on trade imposed by the exporting country, typically at the request of the importing country's government is referred to as aa. Specific tariff quotab. Trade reconciliationc. Ad valorem tariffd. Voluntary export restraint

28.According to the 1986 Uruguay Round _____ was to be created to implement the GATT agreement.a. World Bankb. United Nationsc. World Trade Organizationd. International Monetary fund

29.The TRIPS regulations established at the 1995 Uruguay Rounda. Organized OECD countries to eliminate tariffs on textilesb. Set a new level of agriculture subsidiesc. Established new tariff levels on technologyd. Established regulations on patents and copyrights

30.Which of the following is not a reason for the pressure for greater protectionism that occurred during the 1980s and early 1990s?a. The persistent trade deficit in the U.S. strained the world trading systemb. Japanese economic success strained the world trading systemc. Many countries found ways to get around GATT regulationsd. The growing U.S. trade surplus with Japan strained the world trading system

31.This act allows Americans to sue foreign firms that use property in Cuba confiscated from them after the 1959 revolution.a. Anti-Dumping Actb. Buy America Actc. Helms-Burton Actd. D'Amato Act

32.Subsidies have been criticized for all of the following reasons excepta. They allow inefficient farmers stay in businessb. They encourage countries to produce products that could be grown more

cheaply elsewhere and importedc. They increase international trade in agricultural productsd. They encourage to overproduce heavily subsidized agricultural products

33.By lowering production costs, _____ help domestic producers compete against foreign imports.a. Quotasb. Tariffs

c. Dutiesd. Subsidies

34. In recent decades, tariff barriers have been _____ while non tariff barriers have been _____.a. Rising, fallingb. Falling, levelingc. Leveling, risingd. Falling, rising

35.A quota rent isa. Levied as a fixed charge for each unit of a good importedb. Levied as a proportion of the value of the imported goodc. A quota on trade imposed by the exporting countryd. The extra profit producers make when supply is artificially limited by an

import quota

36. In the United States only firms allowed to import cheese are certain trading companies, each of which is allocated the right to import a maximum number of pounds of cheese each year. Identify the trade restriction being imposed by the U.S. here.a. Subsidyb. Ad valorem tariffc. Import quotad. Specific tariff

37.TRIPS regulations oblige WTO members to all of the following excepta. Comply with the rules within 10 years in the case of the poorest countriesb. Comply with the rules within 5 years in the case of rich countriesc. Grant and enforce copyrights lasting 50 years.d. Grant and enforce patents lasting at least 20 years.

38.This is a direct restriction on the quantity of some good that may be imported into a country.a. Specific tariffb. Ad valorem tariffc. Import quotad. Subsidy

39.Free tradea. Describes the range of policy instruments that governments use to intervene

in international tradeb. Is a government payment to a domestic producerc. Reduces the overall efficiency of the world economy.d. Refers to a situation in which a government does not attempt to restrict

what its citizens can buy from or sell to another country

40.Which of the following observations pertaining to government subsidies is incorrect?a. They mainly benefit domestic producers, whose international competitiveness

is increasedb. They must be paid for, typically by taxing individuals and corporationsc. Whether they generate national benefits that exceed their national costs is

debatabled. They help foreign producers gain a competitive advantage over

domestic producers

41.The U.S. government using the threat of punitive trade sanctions to try to get the Chinese government to enforce its intellectual property laws is an example of government intervention based ona. Human rights protectionb. Retaliationc. Consumer protectiond. National security

42. If a government grants preferential trade terms to a country it wants to build strong relations with, the government is employing a policya. To protect national securityb. To further foreign policy objectivesc. Of retaliationd. Of human rights protection

43.Which of the following statements concerning a voluntary export restraint is not true?a. It is a variant of the import quotab. It raises the domestic price of an imported goodc. In most cases, it benefits consumers.d. It benefits domestic producers by limiting import competition

44.Which of the following is variously defined as selling goods in a foreign market at below their costs of production or as selling goods in a foreign market at below their "fair" market value?a. Dumpingb. Export restraintc. Ad valoremd. Local content requirement