INTB 3080 - Exam Review With 100%
Correct Answers
Trade policies (tariffs, subsidies, antidumping, LCR, etc) benefit who and hurt who? - CORRECT
ANSWER✔✔they're pro-producer and anticonsumer
-gains accrue to producers (who are protected from foreign competitors) but consumer lose bc
they must pay more for imports
What are the 2 types of arguments for government intervention in international trade -
CORRECT ANSWER✔✔political and economic
What are the 3 political arguments for gov intervention in trade? - CORRECT ANSWER✔✔1)
protecting the interest of certain groups, often at the expense of other groups
2) promoting goals with regard to foreign policy, human rights, consumer protection, etc
3) protect certain industries for national security
What is the economic argument for gov intervention in trade? - CORRECT ANSWER✔✔theyre
about boosting the overall wealth of a nation
what is the downfall for the argument that gov intervention is necessary to protect jobs? -
CORRECT ANSWER✔✔political intervention can hurt consumers and be self-defeating
what is the downfall of the argument that gov should use the threat to intervene in trade policy
as a bargaining tool to open foreign markets? - CORRECT ANSWER✔✔this can be risky bc if it
fails, it can result in higher trade barriers
whats the argument against infant industry argument? - CORRECT ANSWER✔✔govs often end
up protecting the inefficient
, why do gov intervene in infant industry argument? - CORRECT ANSWER✔✔so domestic
industries can get first mover advantages
What 2 things do strategic trade policies suggest? - CORRECT ANSWER✔✔1) with subsidies, gov
can help domestic firms gain first mover advantages in global industries where econs of scale
are important
2) gov subsidies ,ay help domestic firms overcome barriers to entry into such industries
What are the 2 problems of strategic trade policy - CORRECT ANSWER✔✔1) may invite
retaliation, in which case all will lose
2) may be captured y special interest groups, which will distort it to their own ends
3 things abt GATT - CORRECT ANSWER✔✔1) product of the postwar free trade movement
2) successful in lowering trade barries on manufactured good and commodities
3) stimulated econ growth
The Uruguay Round fo GATT talks and the establishment of WTO have strengthened the world
trading system by what 3 things? - CORRECT ANSWER✔✔1) extending GATT rules to services,
increasing protection for IP
2) reducing agricultural subsidies
3) enhancing monitoring and enforcement mechanisms
How does trade barriers act as a constraint? - CORRECT ANSWER✔✔acts as constraint on a
firm's ability to disperse its various production activities to optimal locations around the globe
whats a response to trade barriers? - CORRECT ANSWER✔✔to establish more production
activities in protected countries
Correct Answers
Trade policies (tariffs, subsidies, antidumping, LCR, etc) benefit who and hurt who? - CORRECT
ANSWER✔✔they're pro-producer and anticonsumer
-gains accrue to producers (who are protected from foreign competitors) but consumer lose bc
they must pay more for imports
What are the 2 types of arguments for government intervention in international trade -
CORRECT ANSWER✔✔political and economic
What are the 3 political arguments for gov intervention in trade? - CORRECT ANSWER✔✔1)
protecting the interest of certain groups, often at the expense of other groups
2) promoting goals with regard to foreign policy, human rights, consumer protection, etc
3) protect certain industries for national security
What is the economic argument for gov intervention in trade? - CORRECT ANSWER✔✔theyre
about boosting the overall wealth of a nation
what is the downfall for the argument that gov intervention is necessary to protect jobs? -
CORRECT ANSWER✔✔political intervention can hurt consumers and be self-defeating
what is the downfall of the argument that gov should use the threat to intervene in trade policy
as a bargaining tool to open foreign markets? - CORRECT ANSWER✔✔this can be risky bc if it
fails, it can result in higher trade barriers
whats the argument against infant industry argument? - CORRECT ANSWER✔✔govs often end
up protecting the inefficient
, why do gov intervene in infant industry argument? - CORRECT ANSWER✔✔so domestic
industries can get first mover advantages
What 2 things do strategic trade policies suggest? - CORRECT ANSWER✔✔1) with subsidies, gov
can help domestic firms gain first mover advantages in global industries where econs of scale
are important
2) gov subsidies ,ay help domestic firms overcome barriers to entry into such industries
What are the 2 problems of strategic trade policy - CORRECT ANSWER✔✔1) may invite
retaliation, in which case all will lose
2) may be captured y special interest groups, which will distort it to their own ends
3 things abt GATT - CORRECT ANSWER✔✔1) product of the postwar free trade movement
2) successful in lowering trade barries on manufactured good and commodities
3) stimulated econ growth
The Uruguay Round fo GATT talks and the establishment of WTO have strengthened the world
trading system by what 3 things? - CORRECT ANSWER✔✔1) extending GATT rules to services,
increasing protection for IP
2) reducing agricultural subsidies
3) enhancing monitoring and enforcement mechanisms
How does trade barriers act as a constraint? - CORRECT ANSWER✔✔acts as constraint on a
firm's ability to disperse its various production activities to optimal locations around the globe
whats a response to trade barriers? - CORRECT ANSWER✔✔to establish more production
activities in protected countries
