MKT358-07 Questions and Answers Latest updated,100% CORRECT

MKT358-07 Questions and Answers Latest updated Which of the following is a trade policy instrument that the GATT and WTO have been most successful in limiting? A. Local content requirements B. Tariffs C. Subsidies D. Voluntary export restraints E. Import quotas Which of the following groups benefits the most from the imposition of tariffs? A. Domestic producers B. Consumers C. Exporters and importers D. Foreign producers E. International bodies such as WTO 34. Which of the following identifies an attribute of tariffs? A. Tariffs reduce the price of foreign goods for domestic consumers. B. Tariffs reduce the overall efficiency of the world economy. C. Tariffs increase exports from a sector. D. Tariffs increase foreign competition for domestic producers. E. Tariffs increase efficient utilization of resources. By lowering production costs, subsidies help domestic producers to: A. gain export markets. B. meet import quotas. C. meet voluntary export restraints. D. meet the local content requirement. E. compete in the domestic market against local producers. Which of the following groups would benefit the most from receiving subsidies? A. Governments B. International organizations such as the WTO C. Domestic producers D. Importers E. Foreign competitors Which of the following statements is true about import quotas? A. Import quotas benefit domestic producers by limiting import competition. B. Import quotas always lower the prices for domestically produced goods. C. Higher tariff rates are usually applied to imports within the quota than those over the quota. D. Import quotas benefit consumers by decreasing the domestic price of an imported good E. Import quotas help foreign producers gain a competitive advantage. Which of the following is the term for when a lower tariff rate is applied to imports within the quota than those over the quota? A. Tariff rate quota B. Voluntary import restraint C. Import duty D. Quota rent The country of Argonia imposes an ad valorem tariff of 10 percent on 1 million tons of rice imports, after which an out­of­quota tariff of 80 percent is applied. Which of the following trade policy instruments is Argonia using? A. Subsidy B. Tariff rate quota C. Voluntary export restraint D. Tariff ceiling E. Local content requirement Which of the following refers to a quota on trade imposed by the exporting country, typically at the request of the importing country's government? A. Tariff rate quota B. Quota rent C. Voluntary export restraint (VER) D. Quota share E. Export embargo 44. Which of the following requires that some specific fraction of a good must be produced domestically? A. International allocation requirement B. Local content requirement C. Specific quota requirement D. Ad valorem portion requirement E. Domestic sales requirement 45. Animax Limited got an order to sell 50,000 central processing units (CPUs) to Palladia, but the Palladian government stipulated that 15 percent of the component parts of those CPUs must be produced in Palladia. This stipulation by the Palladian government would be example of a(n): A. voluntary export restraint. B. quota rent. C. import quota. D. local content requirement. E. antidumping policy. Which of the following are bureaucratic rules designed to make it difficult for imports to enter a country? A. Voluntary export restraints B. Consumer regulations C. Subsidies D. Administrative trade policies E. Public sector regulations The Palladian government required that all imported products that came from Lovaskiya be checked by Palladian customs inspectors. The inspection was done at a container freight station that was both remote and poorly staffed. This delayed the Lovaskiyan consignment from reaching the consumers in Palladia. The inspection strategy adopted by the customs officers in Palladia is an example of a(n): A. antidumping policy. B. voluntary export restraint policy. C. administrative trade policy. D. monopolistic competition policy. E. tariff rent policy. If Argonia exports vast quantities of cheap toys to Cadmia, selling them at below their costs of production, it would constitute: A. monopolism. B. dumping. C. offshoring. D. nearshoring. E. subsidizing. Dumping involves foreign producers: A. attempting hostile takeovers of domestic firms and usurping the available resources for production. B. indiscriminately exploiting the natural resources of a foreign country to create a later demand that can be met only by imports. C. eliminating competition by subsidizing prices in a foreign market with home market profits and eventually raising prices to earn substantial profits. E. exporting only a small quantity of their products into an importing country. Which of the following best indicates the motive for foreign firms to engage in dumping? A. Unloading excess production in foreign markets B. Cutting labor costs to reduce the costs of production C. Providing a wider range of products for consumers in foreign markets D. Meeting the voluntary export requirements imposed on it Which of the following is considered to be the ultimate objective of antidumping policies? A. Protecting consumers from high prices B. Preventing domestic firms from unloading their excess production in domestic markets C. Protecting domestic producers from unfair foreign competition D. Protecting consumers from substandard and hazardous products E. Preventing foreign products from entering domestic market Which of the following is the most common political argument for government intervention in international trade? A. Decreasing the prices of products in the domestic market B. Promoting strategic trade policy C. Protecting jobs and industries from unfair foreign competition D. Improving efficiency of domestic labor E. Protecting human rights 56. Cadmia banned imports of Mattel toys with high levels of toxic lead, manufactured in Argonia. The underlying motive for such a move could be: A. protecting domestic businesses from unfair pricing. B. protesting the pricing of toys below their costs of production. C. protecting consumers from unsafe products. D. increasing the trade surplus of the United States. E. reducing dumping of cheap toys. Many developing countries have a potential comparative advantage in manufacturing, but new manufacturing industries cannot initially compete with well­established industries in developed countries, according to: A. economic development argument. B. comparative advantage theory. C. national security argument. D. infant industry argument. E. mixed economy theory. One of the main reasons why many economists remain critical of the infant industry argument is its reliance on the assumption that: A. protection of manufacturing from foreign competition is harmful. B. absolute advantage cannot sustain productivity of an industry. C. foreign firms too come under the definition of infant industry when they newly enter a foreign market. D. firms are unable to make efficient long­term investments by borrowing money from the domestic or international capital markets. 60. Which of the following is a major reason why many economists remain critical of the infant industry argument? A. It makes the domestic industry inefficient. B. It does not provide guaranteed employment for the citizens. C. It affects the standards of living and per capita income of the people. D. It promotes foreign direct investment. E. It leads to reduced prices in domestic markets. 61. A government should use subsidies to support promising firms that are active in newly emerging industries, according to: A. strategic trade policy. B. public policy. C. absolute advantage. D. product life­cycle. E. industrialization. 66. The economically damaging effects of the Great Depression were worsened in 1929 by the: A. First World War. B. U.S. stock market collapse. C. spread of communism through Europe. D. Cold War between the world's superpowers. E. harvest failure in Great Britain and famine in Ireland. 68. Which of the following multilateral agreements was established under U.S. leadership in 1947, with the objective to liberalize trade by eliminating tariffs, subsidies, import quotas, and the like? A. General Agreement of Tariffs and Trade (GATT) B. North American Free Trade Agreement (NAFTA) D. Free Trade Areas of the Americas (FTAA) E. North Atlantic Treaty Organization (NATO) Which of the following statements is true regarding GATT? A. GATT attempted to liberalize trade restrictions in one go. B. In its early years, GATT was unsuccessful and hence was superseded by the World Bank. C. GATT regulations were mostly enforced by the EU nations rather than by a mutual monitoring mechanism. D. Tariff reductions through negotiations were completed in three rounds. E. last round for tariff reduction, the Uruguay Round, was launched in 1986 and completed in Dec1993. One of the reasons why protectionist pressures arose around the world during the 1980s was: A. the different ways many countries found to get around GATT regulations. B. the opening up of national markets to cheap products from China. C. the fall of the Soviet Union. E. Japanese failure in industries such as automobiles/semiconductors strained the world trading system. Which of the following best explains the reason for the rise in protectionist pressures around the world during the 1980s? A. The strict GATT bureaucracy in Geneva controlling trade regulations B. The opening up of international markets to cheap products from China C. The fall of the Soviet Union D. The persistent trade deficit in the world's largest economy, the United States E. The economic failure of Japan which hampered the global economy Which of the following is a provision of the Uruguay Round Agreement? A. A wide range of services were to be excluded from GATT fair trade and market access rules. C. The International Monetary Fund (IMF) was to be created to implement the GATT agreement. D. Barriers on trade in textiles were to be significantly reduced over 10 years. E. Average tariff rates imposed by developed nations on manufactured goods were to be raised by 20 percent of the value, the highest level in modern history. The United States accused Libya and Iran of supporting terrorist action and building weapons of mass destruction. The U.S. government, therefore, imposed trade sanctions against the two countries. Which of the following political arguments does this exemplify? A. Retaliation and trade war B. Furthering foreign policy objectives C. Strategic trade policy D. Corporate security E. Protecting infant industries The WTO's Agreement on which of the following is an attempt to narrow the gaps in the way intellectual property rights are protected around the world and to bring them under common international rules? A. Intellectual Property Rights Enforcement Directive (IPRED) B. Court of Arbitration of Intellectual Property (CAIP) C. Trade-Related Aspects of Intellectual Property Rights (TRIPS) D. Intellectual Property Rights Enforcement and Resolution (IPER) E. International Body on Intellectual Property (IBIP) Which of the following indicates the difference between GATT and WTO? A. WTO has strict time limits unlike GATT. B. WTO operates on the basis of consensus unlike GATT. D. GATT's verdict is binding unlike that of WTO's. E. WTO allows member-countries to block adoption of arbitration reports unlike GATT. Which of the following is true regarding the difference between GATT and WTO? A. The WTO was encouraged to extend its reach to encompass regulations governing foreign direct investment unlike GATT. 79. The WTO was encouraged to extend its reach to encompass regulations governing foreign direct investment, something the GATT had never done. Two of the first industries targeted for this reform were: A. global telecommunication and financial services industries. B. scientific research and defense sector. C. pharmaceuticals and heavy metal industry. D. pharmaceuticals and biotechnology. E. scientific research and global telecommunication. Which of the following is NOT a constraint on a firm's ability to disperse its productive activities to foreign countries? A. Tariff barriers raising the costs of exporting products to a country B. Quotas restricting the quantity of a good that can be imported into a country C. Local content requirements demanding a specific fraction of domestic production D. The increasing integration of the world economy E. Antidumping policies limiting the ability of a firm to use aggressive pricing Which of the following is a loophole in antidumping laws that is being exploited by many countries to pursue protectionism? A. The slackness of enforcement agencies B. WTO's noncommittal approach to antidumping laws C. Bilateral VERs which subvert antidumping laws D. The rather vague definition of what constitutes "dumping" E. Lack of consensus among member nations Myra is a firm producing premium handbags for women. These bags are manufactured and patented in the country of Ceria. Manufacturers in the country of Argonia create counterfeit Myra bags and sell them in the local markets of Argonia. These bags are sold at almost similar prices to the original in other countries. Which of the following is likely to happen? A. Expansion of world market for Cerian products B. Reduction in the export opportunities for Myra's hand bags in Argonia C. Reduction in import of all Argonian goods D. Increase in the prices of handbags produced by Myra in Argonia E. Reduction in opportunities of export from Argonia to other countries 85. The threat of antidumping action: A. helps the firm raise capital in the primary market. B. limits the ability of a firm to raise prices in response to high demand. C. enhances the firm's ability to disperse its productive activities in an efficient manner. D. limits the ability of a firm to use aggressive pricing to gain market share in a country. E. enhances a firm's competitive advantage to indigenous competitors in that country.