trade regulations and industrial policies MCQs

Practise focused trade regulations and industrial policies questions with marked answers for exam preparation and subject revision.

trade regulations and industrial policies Mcqs
1. Compared to what occurred under free trade, Mexicos producer surplus ____ and consumer surplus ____ as a result of the subsidy Use the figure that you have plotted to calculate the amounts ?
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A. decreases, decreases

B. increases, decreases

C. increases, increases

D. decreases, increases
2. Under free trade suppose that Japan can supply radios t mexico at the price of $45 Therefore, Mexicos imports equal ?
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A. 15 radios

B. 10 radios

C. 5 radios

D. zero radios
3. Referring to the above, the embargo was mainly resisted by ?
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A. U.S grains consumers and producers of bread

B. Grain consumers in foreign countries

C. Grain Producers in foreign countries

D. U.S farmers and grains companies
4. All of the following are fundamental to the World Trade Organization except ?
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A. the prohibition of import quotas and export quotas

B. nondiscrimination in trading relationships

C. the use of the most-favored nation clause (normal trade relations)

D. bilateral tariff reductions to promote trade liberalization
5. The organization that currently establishes rules of conduct for firms engaging in international trade is the ?
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A. International Trade Commission

B. World Trade Organization

C. World Bank

D. Department of justice

6. Which round of international trade negotiations resulted in the creation of the World Trade Organization ?
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A. Tokyo Round of 1973-1979

B. Uruguay Round of 1986-1993

C. Kennedy Round of 1964-1967

D. Doha Round of 2003-2007

7. ________ protection such as the escape clause, provide temporary protection to domestic industries facing competition from fairly traded foreign goods?
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A. domestic content

B. generalized system of preference

C. countervailing duty

D. safeguards
8. When one country provides most favored nation status (normal trade relations) for another, it agrees to ?
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A. charge that nations products a higher tariff than any other nations

B. exports to that nation any products that it wants to purchase

C. charge that nations products a tariff rate no higher than that on any other nation

D. charge the nations products a lower tariff than any other nations

9. The result of antidumping tariffs is to ?
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A. decrease producer surplus in the importing country

B. increase consumer surplus in the importing country

C. impose a price floor on foreign prices in the importing country

D. impose a price ceiling on foreign price in the importing country

10. Suppose that Russia steel firms engage in dumping in the German market in terms of overall economic welfare, German welfare would _______ as the result of the dumping?
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A. an data-mce-type="bookmark" style="width: 0px;overflow: hidden;line-height: 0" class="mce_SELRES_start">?A. increase

B. decrease

C. not change

D. None of These

11. To help its firms penetrate Mexicos radio market suppose the Japanese government provides them a subsidy of $15 for each radio shipped to Mexico As a result of this trade policy ?
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A. The price of radios in Mexico equals $60 and its imports equal 30 radios

B. The price of radios in Mexico equals $30 and its imports equal 30 radios

C. The price of radios in Mexico equals $40 and its imports equals 20 radios

D. Th price of radios in Mexico equals $20 and its imports equal 40 radios

12. During the post-world War II era?
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A. NTBs and tariffs have decreased in relative importance

B. NTBs have increased and tariffs have decreased in relative importance

C. NTBs have decreased and tariffs have increased in relative importance

D. Nontariff barriers (NTBs) and tariffs have increased in relative importance

13. Following World War II the United States and other countries sought to liberalize trade among each other the first major postwar step toward trade liberalization was the ?
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A. Smoot Hawley Organization

B. McKinley Agreement on Trade policy

C. General Agreement on Tariffs and Trade

D. World Trade Organization

14. Antidumping duties applied to imported goods ?
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A. result in lower-priced goods for domestic consumers

B. result in decreases in consumer surplus for domestic households

C. are abolished by the World Trade Organization

D. are imposed by industrial countries but not developing countries

15. Concerning dumping, which of the following is true ?
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A. U.S firms can obtain protection from foreign dumping, even though this protection tends to harm overall U.S welfare

B. dumping can never be a profit-maximizing strategy for U.S firms to pursue

C. predatory dumping represents the most common form of dumping by U.S firms

D. U.S firms rarely if ever, engage in distress dumping or persistent dumping

16. ________ are quotas that result in a total prohibition of trade?
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A. embargoes

B. tariff-rate quotas

C. voluntary export restraints

D. nontariff barriers

17. According to the United States ____ is the number one violator of intellectual property rights
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A. Australia

B. China

C. Canada

D. Japan

18. Countervailing duties levied by the U.S government are imposed to offset ?
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A. foreign dumping of goods in the U.S

B. buy national policies of foreign government

C. stringent environmental regulations of foreign government s

D. subsidies granted to foreign firms that export to the U.S
19. The effect of the most favored nation (normal trade relations) clause is to ?
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A. maintain a nondiscriminatory structure of tariffs

B. increase all tariffs between countries

C. maintain a discriminatory structure of tariffs

D. eliminate all tariffs between countries

20. The World Trade Organization is sometimes criticized for all of the following reasons except?
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A. it has no way to solve trade disputes among member countries

B. it is a puppet of multinational corporations

C. favors free trade over the quality of the environment

D. it reduces the sovereignty of member countries

21. Concerning economic sanctions, export embargo induces greater losses in consumer surplus for the target country the?
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A. more elastic the target country demand schedule

B. more in elastic the target country supply scheduleB.

C. greater then available output from alternative suppliers

D. lesser it initial dependence on foreign produce goods.

22. The U.S has granted China permanent most favored nation treatment (normal trade relations) This means that the tariff schedules which apply to U.S imports from china ?
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A. have tariff rates that are identical to the rates that apply to other countries to which the U.S grants most-favored nation treatment

B. have tariff rates equal to zero suggesting a free trade policy for the United States

C. have lower tariff rates than the rates that apply to any other country sending goods to the United States

D. have lower tariff rates than the rates that apply to other countries to which the U.S grants most favored nation treatment

23. Those who argue in favor of import protection generally give the impression that such restricted trade will?
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A. provide benefits to some particular industry

B. decrease the level of national security

C. provide benefits to the entire nation

D. not yield welfare losses for the nation

24. The institutional framework developed in 1947 to promote trade liberalization is known sa?
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A. the WTO

B. the IMF

C. the World Bank

D. the GATT
25. The theory of suggests that government can assist domestic companies in capturing economic profits from foreign competitors ?
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A. Strategic trade policy

B. export promotion policy

C. international dumping

D. countervailing duties

26. In 1980 the U.S imposed export quotas on grain sold to the Soviet Union in response to its armed invasion of Afghanistan if other nations do not increase grain exports to the soviets all the following would likely occur except?
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A. Export revenues would decrease for U.S producers

B. Consumer surplus would decrease for the soviets

C. Grain prices would rise in the Soviet union

D. Grains prices would rise in the united States
27. The strongest political pressure for a trade policy that results in higher protectionism comes from?
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A. domestic workers lobbying for export restrictions

B. domestic consumers lobbying for export restrictions

C. domestic workers lobbying for import restriction

D. domestic consumers lobbying for import restrictions
28. Economic sanctions?
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A. are prohibited by the World Trade Organization

B. affect international trade but not international financial flows

C. involve restrictions on imports, but not exports

D. involve restrictions in imports exports and or financial flows