Government Policy And International Trade

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Question 1

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Tariffs are unambiguously pro-consumer and anti-producer.

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Question 2

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Specific tariffs are levied as a proportion of the value of the imported good.

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Question 3

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Export tariffs are far less common than import tariffs.

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Question 4

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A subsidy helps domestic producers to compete against foreign imports.

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Question 5

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A common hybrid of a quota and a rent is known as a quota rent.

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Question 6

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Unlike other trade policies,local content regulations tend to benefit consumers and not producers.

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Question 7

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The Buy America Act 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 disadvantage.

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Question 8

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Bureaucratic rules designed to make it difficult for imports to enter a country are called local content requirements.

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Question 9

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Local content regulations provide protection for a domestic producer of parts by limiting foreign competition.

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Question 10

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A company that sells its product in a foreign market below the cost of production may be accused of dumping.

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Question 11

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Antidumping policies are designed to punish foreign firms that are engaged in dumping.

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Question 12

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Antidumping policies vary drastically from country to country.

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Question 13

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Protecting industries deemed important for national security,and retaliating against unfair foreign competition are economic arguments for intervention.

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Question 14

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The Helms-Burton Act of 1996 was aimed at foreign companies that were undermining U.S.trade sanctions against Libya and Iran.

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Question 15

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According to the infant industry argument,many developing countries have a potential comparative advantage in manufacturing,but new manufacturing industries cannot initially compete with established industries in developed countries.

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Question 16

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The infant industry argument is the latest argument for government intervention in trade.

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Question 17

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Strategic trade policy suggests that a government should use subsidies to support promising firms that are active in newly emerging industries.

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Question 18

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GATT has not recognized the infant industry argument as a legitimate reason for protectionism.

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Question 19

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Krugman has suggested that trade policy designed to retaliate against another country's trade policy would hurt the citizens of both countries.

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Question 20

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Governments do not always act in the national interest when they intervene in the economy; politically important interest groups often influence them.

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