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Q:
The European Commission is the European Union's ultimate decision-making body and is composed of the different ministers of the member countries.
Q:
The shifting of trade to countries in a regional group at the expense of trade with countries not in the group is known as trade internalization.
Q:
Trade creation allows consumers access to more goods at a lower price than would have been possible without integration.
Q:
The shifting of resources from inefficient to efficient companies as trade barriers fall produces static effects.
Q:
Static effects are the overall growth in the market and the impact on a company caused by expanding production and by the company's ability to achieve greater economies of scale.
Q:
When free mobility of factors of production is added to a common market, the result is a customs union.
Q:
The goal of a free trade agreement is to abolish all tariffs among member countries.
Q:
Most trade groups contain countries in the same area of the world, even though neighboring countries usually lack a common history and interests.
Q:
One of the reasons that neighboring countries tend to ally is similar consumer tastes.
Q:
The most-favored-nation policy is a WTO privilege that allows member nations to restrict tariff cuts to members.
Q:
GATT's contribution to trade liberalization made possible the expansion of world trade in the second half of the twentieth century.
Q:
Most MNEs generate a majority of their revenues in their home regions.
Q:
As companies expand internationally, they must change their organizational structure and operating strategies to take advantage of regional trading groups.
Q:
The European Union is an example of regional integration.
Q:
Regional integration is better known as global integration through the World Trade Organization.
Q:
What was the primary purpose of the formation of Sinergia?
A) charge tariffs on Walmart imports
B) purchase Walmart's major suppliers
C) better compete with Walmart on price
D) include Walmart in the regional supply chain
Q:
Which of the following is Walmart's competitive advantage in Mexico?
A) Walmart purchased all Mexican retail chains and eliminated competitors.
B) Walmart is able to transfer its "everyday low prices" concept to Mexico.
C) Walmart offers affordable, unique products for niche markets in Mexico.
D) Customers prefer to buy from American companies instead of Mexican companies.
Q:
Which of the following primarily triggered Toyota's investment in the European Union?
A) Europeans demanded affordable, high quality cars from Japan.
B) A common currency gave Europeans more buying power.
C) The EU lowered trade barriers on foreign auto imports.
D) Japan and the EU formed a free trade agreement.
Q:
The Organization of Petroleum Exporting Countries ________.
A) uses import tariffs to control oil prices
B) stabilizes prices based on demand
C) uses quotas to control oil prices
D) produces all of the world's oil
Q:
What are the main arguments for limiting trade in services? What is your opinion on limiting trade in services?
Q:
List and define the types of nontariff barriers that limit the quantity of goods traded: quotas, embargoes, buy local legislation, standards and labels, specific permission requirements, administrative delays, and reciprocal requirements.
Q:
In a short essay, list and discuss the nontariff barriers that relate to direct price influences: subsidies, aid and loans, customs valuations, and other direct price influences.
Q:
Describe and compare the different types of tariffs (duties).
Q:
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.
Q:
What is dumping? What are the possible effects of dumping on a country's economy?
Q:
What are common reasons that governments enact export restrictions? What are the possible negative consequences of such restrictions?
Q:
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."
Q:
What is the difference between import substitution policies and export-led development policies? What are the potential effects of each?
Q:
Why do developing countries sometimes impose import restrictions to increase their levels of industrialization?
Q:
Explain the rationale for and problems with making the infant-industry argument work as intended.
Q:
What are the disadvantages of import restrictions in regards to creating domestic employment opportunities?
Q:
Every time countries enter a new trading agreement, service trade tends to grow more rapidly than merchandise trade.
Q:
The international regulatory situation for trade is becoming more, rather than less, complex.
Q:
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.
Q:
Companies that have integrated their supply chains internationally tend to lobby their home governments for increased protectionist measures.
Q:
At present there is little reciprocal recognition of professional licensing among countries.
Q:
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.
Q:
The purpose of "Made in" labels on imported products is to enable countries to keep records of the origin of imports.
Q:
A quota is a quantitative limit on the amount of a product that can be traded.
Q:
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.
Q:
Agricultural subsidies by developed countries impede the competitiveness of agricultural exports by developing countries.
Q:
An effective tariff is the sum of the ad valorem tariff plus the specific duty.
Q:
The most common type of tariff is the export tariff.
Q:
Import trade controls, but not export trade controls, can be used as a weapon of foreign policy.
Q:
The essential-industry argument holds that industries with potential export capabilities should be protected.
Q:
Home country consumers are typically active in preventing their domestic companies from dumping products into foreign markets.
Q:
The lowering of a foreign producer's price as a result of an imposed import tax is known as an optimum tariff.
Q:
Export controls are highly effective for digital products, such as computers, TVs, and cameras.
Q:
Countries typically establish export restrictions to encourage the development of substitute products.
Q:
The comparable access argument for import restrictions is a more valid economic argument for products using small-scale technology than for products requiring substantial economies of scale to be competitive.
Q:
The argument for using import controls to promote exports is partially premised on the assumption that other countries will remove their import restrictions as a result.
Q:
Export-led development refers to the off-shoring of production.
Q:
Import substitution is a program promoting local production of products that would otherwise be imported.
Q:
Export prices of primary products fluctuate less than export prices of manufactured products.
Q:
The argument for using protectionism to bring about industrialization in developing countries presumes that gains will occur because the industry will become internationally competitive.
Q:
Infant-industry protection requires some segment of the economy to incur the higher costs when local production is inefficient.
Q:
The infant-industry argument for trade protection holds that an industry needs government protection from imports until it becomes competitive enough in world markets.
Q:
On average, workers displaced by imports earn higher wages in the new jobs they accept.
Q:
The countries most likely to be successful at using trade retaliation are large trading countries.
Q:
Helping a struggling domestic company through import restrictions frequently causes other countries to retaliate.
Q:
The group most likely to become involved in disputes concerning trade protectionism is consumers.
Q:
In most cases, trade protectionism makes it easier for a company to buy what it needs and to sell products in global markets.
Q:
The term protectionism, when applied to international trade, refers to governmental restrictions and incentives to affect trade flows.
Q:
People who argue for keeping the U.S. trade embargo with Cuba claim all of the following EXCEPT which one?
A) There is not much economic potential from trade given Cuba's small population and low per capita income.
B) Removal of the embargo will cause much more Cuban immigration to the United States.
C) If the Cuban economy is weakened just a bit more, the Cuban political-economic system cannot be sustained.
D) There will be a backlash among countries supplying such commodities as sugar to the United States if the U.S. buys them from Cuba instead.
Q:
People who argue for lifting the U.S. trade embargo with Cuba claim all of the following EXCEPT which one?
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.
Q:
The U.S. catfish industry successfully petitioned the U.S. government to require that catfish varieties imported from Vietnam be labeled as tra, basa, or pangasius. This is an example of which of the following?
A) an embargo
B) a tariff
C) a nontariff barrier
D) a direct price influence
Q:
The U.S. catfish industry petitioned the U.S. government for increased taxes on imported Vietnamese fish, claiming that the fish were being sold below the cost of production. The U.S. catfish industry was accusing the Vietnamese fish industry of ________.
A) dumping
B) using an embargo
C) subsidizing
D) using offsets
Q:
Which of the following is NOT causing greater complexity in the regulation of trade?
A) growth in export tariffs
B) services available over the Internet
C) heightened concern about product safety
D) development of new products that must be classified
Q:
In nearly half the cases in which U.S. firms have requested protection from imports, one or more U.S. companies in the industry opposed the protection. What was the reason for opposing protection?
A) They did not want consumers to have to pay higher prices that would result from protection.
B) These were foreign-owned companies that saw the opportunity to serve the U.S. market.
C) They feared that they would lose foreign export markets because of retaliation.
D) They believed that they could compete against global and domestic rivals.
Q:
Companies with ________ would most likely oppose global protectionist measures.
A) internationally integrated supply chains
B) domestically focused supply chains
C) multidomestic production facilities
D) product differentiation
Q:
The U.S. automobile industry has attempted to counter import competition in all the following ways EXCEPT ________.
A) concentrating on market niches that initially had less import competition
B) lobbying for customs deposits so that importers' costs would be raised
C) moving some production to lower-cost countries and exporting to the United States
D) effecting internal adjustments, such as cost efficiencies and improved quality
Q:
A physician, who is a citizen of and licensed in Country A, meets the professional licensing requirements of Country B. The physician will most likely ________.
A) have to pass a language proficiency exam before being allowed to work in Country B
B) not be allowed to work in the not-for-profit sector in Country A or Country B for a set period
C) have to get a work permit from Country B's immigration authorities to work in Country B
D) have to work in the not-for-profit sector in Country B for a period of time before being permitted to work for a profit-seeking organization
Q:
The fact that there are few reciprocal agreements among countries on the licensing of professionals most likely means that ________.
A) universities' study abroad programs do not enable students to obtain dual degrees and licenses from more than one country
B) more service functions are being handled as not-for-profit
C) people immigrate to those countries with the highest standards so as to more easily become licensed anywhere else
D) there is an effective limitation on trade in services
Q:
Which of the following hypothetical examples would be a restriction on the import of services?
A) The U.S. restricts foreign companies from carrying cargo between two U.S. cities.
B) Japan restricts North Koreans from visiting Tokyo Disneyland.
C) China does not allow the importation of rice from Thailand.
D) Canada does not allow Air Canada to buy Brazilian aircraft.
Q:
Why are offsets considered protectionist measures?
A) Exporters must often find markets for goods outside their lines of expertise.
B) Exports must be sold at a certain percentage price below the price of domestic producers.
C) Companies must submit samples to government authorities before receiving export permission.
D) Trading companies must incur additional inventory carrying charges and pay significantly higher tariffs.
Q:
An import license is ________.
A) an agreement whereby one country gives another country permission to use a patent that a company has registered there
B) a requirement that exporters take merchandise in lieu of money as payment for their sales
C) a requirement that permission be secured from governmental authorities before importation can be undertaken
D) a government prohibition of imports from a specific country
Q:
A voluntary export restriction (VER) refers to ________.
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) limits 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
Q:
In international trade, what is a quota?
A) a guarantee by one country to buy some minimum amount from another
B) a quantitative limit on the amount of a product that can be imported or exported
C) a countertrade arrangement that establishes the value of imports and exports
D) a bilateral agreement calling for mutual access to markets
Q:
Most countries have agreed on how to assess values when their customs agents levy tariffs. Which of the following best expresses this agreement?
A) They should use the value of similar goods arriving at about the same time.
B) They should use the declared invoice price unless they doubt its authenticity.
C) They should assess a value based on local costs to produce a similar product.
D) They should assess a value based on the expected final consumer sales price.
Q:
Tied aid requires a recipient to ________.
A) donate a portion of the funds to the donor country's infrastructure needs
B) use the capital in any way as long as donor country approval is granted
C) employ local workers in management positions
D) spend the funds in the donor country