IBM ASSIGNMENT 1 (CO2)

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A tariff: *

1 point

Increases the volume of trade

Reduces the volume of trade

Has no effect on volume of trade

(a) and (c) of above

Dumping refers to: *

1 point

Buying goods at low prices abroad and selling at higher prices locally

Expensive goods selling for low prices

Reducing tariffs

Sale of goods abroad at low a price, below their cost and price in home market

It is drawback of protection: *

1 point

Consumers have to pay higher prices

Producerrs get higher profits

Quality of goods may be affected

All of the above

It is drawback of free trade: *

1 point

Prices of local goods rise

Government looses income from custom duties

National resources are underutilized

(a) and (b) of above

Members of ________ agree to the tariffs and non-tariff barriers that are applied to imports from nonmember countries. *

1 point

free trade areas

customs unions

economic blocs

regional alliances

Which of the following terms is used to refer to a nation in an economic bloc ceasing to trade with a non-member nation? *

1 point

trade diversion

trade creation

trade autonomy

free trade

Which of the following is not a non-tariff barrier? *

1 point

A quota on apparel

A tax equal to 12% of value on imported oil.

A voluntary export restraint on cars.

A regulation requiring government agencies to favor domestically producers.

The main difference between a tariff and a quota is *

1 point

A quota reduces the quantity of imports more than a tariff

A tariff raises the price of imports more than a quota.

A quota does not harm domestic consumers.

A tariff generates government revenue, while a quota, unless it is sold, does not.

A government procurement regulation or practice constitutes a nontariff barrier when *

1 point

Government agencies are required to purchase from the lowest bidder.

Government shows a preference for domestic sellers over foreign sellers.

Government requires that goods that it purchases meet a uniform safety standard.

Government purchases are financed by tax receipts.

Import quotas are most commonly administered *

1 point

By taxing imports

By auctioning import licenses to the highest bidder.

By granting import rights to domestic firms.

By granting import rights to foreign firms or governments.

The imposition of a tariff on imported steel for the home country results in: *

1 point

Improving terms of trade and rising volume of trade

Higher steel prices and falling steel consumption

Lower profits for domestic steel companies

Higher unemployment for domestic steel workers

Subsidies to domestic firms may lead to: *

1 point

An increase in prices

Higher volume of exports

Higher volume of imports

Increase in welfare of the trading partner

A specific tariff is *

1 point

Any tax on a particular imported good (as opposed to one on all imports).

An import tax that must be paid in kind (giving the government the good itself).

A requirement to pay the government a specified fraction of the monetary value of an imported good.

A tax on imports defined as an amount of currency per unit of the good

When a large country levies a tariff on imports *

1 point

The world price falls.

Demanders of the good on the domestic market are hurt

The domestic price rises by less than the tariff.

All of the above.

What are countervailing measures? *

1 point

Measures which a State may initiate against another State when that other State has legally subsidised any of its domestic industries

Measures which a national government may initiate against another State when that other State has not subsidised any of its domestic industries

Measures which a State may initiate against another State when that other State has illegally subsidised any of its domestic industries

Measures which a national government may initiate against another State when that other State has not illegally subsidised any its domestic industries

Which of the following is the purpose for doing business in the international markets? *

1 point

To expand the oeprations beyound the local geographical limits

To take the advantage of the tax benefits of the foreign country

To develop and sell the products for a particular geographical location and Existence of imperfect markets

All of the above

What happens if a quota has been keeping the domestic price above the world price, but then the world price rises above what has been the domestic price? *

1 point

The country begins to export the good.

The government must subsidize imports to keep them from falling below the quota.

The domestic price rises above the world price, to keep the tariff-equivalent of the quota constant.

Quota rents become zero.

Tariffs and quotas on imports tend to involve larger sacrifices in national welfare than would occur under domestic subsidies. This is because, unlike domestic subsidies, import tariffs and quotas: *

1 point

Permit less efficient home production

Distort choices for domestic consumers

Result in higher tax rates for domestic residents

Redistribute revenue from domestic producers to consumers

Because export subsidies tend to result in domestic exporters charging lower prices on their goods sold overseas, the home country’s: *

1 point

Export revenues will decrease

Export revenues will rise

Terms of trade will worsen

Terms of trade will improve

Which trade restriction stipulates the percentage of a product’s total value that must be produced domestically in order for that product to be sold domestically? *

1 point

Import quota

Orderly marketing agreement

Local content requirement

Government procurement policy

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