978-1259723223 Test Bank TBChap040 Part 9

subject Type Homework Help
subject Pages 9
subject Words 3891
subject Authors Campbell McConnell, Sean Flynn, Stanley Brue

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Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Blooms: Analyze
Difficulty: 03 Hard
Learning Objective: 40-05 Analyze the validity of the most frequently presented arguments for
protectionism.
Test Bank: II
Topic: The Case for Protection: A Critical Review
291. Which of the following is a valid counterargument against using tariffs to protect high
wages from cheap foreign labor?
292. The Smoot-Hawley Tariff Act of 1930 is notorious for which of the following
reasons?
293. Which is not a commonly heard argument for protectionism?
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written consent of McGraw-Hill Education.
domestically.
B. Infant industries need short-term protection from foreign competition in order to grow.
C. Specialization along the lines of comparative advantage can lead to some economic
instability in a nation.
D.
When other nations' economies grow, they typically import fewer goods and services.
294. A major goal of the World Trade Organization is to
295. The World Trade Organization is the successor to the
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written consent of McGraw-Hill Education.
Test Bank: II
Topic: Multilateral Trade Agreements and Free-Trade Zones
296. Which organization meets regularly to establish rules and settle disputes related to
international trade?
297. Which of the following is not a major achievements of the European Union (EU)?
298. The so-called eurozone refers to
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Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
AACSB: Knowledge Application
A c c e s s i b i l i t y :
Keyboard Navigation
Blooms: Remember
Dif f i c u l t y :
01 Easy
Learning Objective: 40-06 Identify and explain the objectives of GATT, WTO, EU, eurozone,
and NAFTA, and discuss offshoring and trade adjustment assistance.
Test Bank: II
Topic: Multilateral Trade Agreements and Free-Trade Zones
299. NAFTA established a free-trade area and eliminated trade barriers between
300. The Trade Adjustment Assistance Act of 2002 focused mainly on assisting
301. "Offshoring" of certain production activities refers to
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written consent of McGraw-Hill Education.
locations.
B. businesses acquiring other businesses abroad.
C. investors putting their funds into foreign assets instead of investing them in local
businesses.
D. firms opening new markets offshore and expanding their targeted export areas.
302. Some people accuse an offshoring firm of "exporting jobs". This activity called
offshoring is really equivalent to
303. Globalization of resource markets has resulted in the business practice of offshoring,
which involves
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40-160
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Learning Objective: 40-06 Identify and explain the objectives of GATT, WTO, EU, eurozone,
and NAFTA, and discuss offshoring and trade adjustment assistance.
Test Bank: II
Topic:
Multilateral Trade Agreements and Free-Trade Zones
304. Frederic Bastiat's satire clearly illustrates that
305. One main point of Frederic Bastiat's satire is that
True / False Questions
306. In terms of trade volume in the past many years, China has been the largest trading
partner of the United States.
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Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
AACSB: Knowledge Application
A c c e s s i b i l i t y : Keyboard Navigation
Blooms: Remember
Dif f i c ul t y : 01 Easy
Learning Objective: 40-01 List and discuss several key facts about international trade.
Test Bank: II
Topic: Some Key Trade Facts
307. In 2014, the United States was the largest exporter in the world.
308. Among the principal exports of the United States are agricultural products.
309. The United States can be classified as an "open" economy in that foreign trade
accounts for more than 50 percent of its GDP.
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310. The U.S. has a sizable trade surplus in services.
311. One major factor that serves as an economic basis for world trade is the uneven
distribution of resources among nations.
312. Comparative advantage is another name for absolute advantage.
313. If a nation's labor can produce more of a good compared to labor in another nation,
then we say that the first nation has a comparative advantage in producing that good.
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314. In a two-nation, two-good world, it is possible for one nation to have the comparative
advantage in both goods.
315. If two nations specialize in their respective comparative advantage and then trade
with each other, both nations can consume output-combinations that are beyond their
production possibilities curves.
316. In a two-nation, two-good world, if one nation is more efficient in producing both
goods than the other nation, then the more-efficient nation cannot gain from trading with the
other nation.
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317. The terms of trade will favor a larger nation over a smaller nation.
318. With constant costs in production, specialization tends to proceed to complete
specialization, but with increasing costs, specialization will not be complete.
319. A nation will import a particular product if the world price is less than the domestic
price.
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Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Blooms: Understand
Difficulty: 02 Medium
Learning Objective: 40-03 Describe how differences between world prices and domestic prices
prompt exports and imports.
Test Bank: II
Topic:
Supply and Demand Analysis of Exports and Imports
320. If a nation starts exporting a product to the rest of the world, then the price of that
product in the exporting nation will rise.
321. The world price for a traded product will be between the domestic no-trade prices of
the trading nations.
322. Import tariffs benefit the consumers of the product involved.
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written consent of McGraw-Hill Education.
Test Bank: II
Topic: Trade Barriers and Export Subsidies
323. If demand for a product is increasing, an import tariff is less restrictive than an import
324. Export subsidies tend to hurt domestic consumers and benefit the foreign consumers.
325. A voluntary export restraint (VER) is similar to an import quota, except that the
former benefits the foreign producers while the latter benefits the domestic producers.
326. Trade protection in most instances transfers wealth from consumers to domestic
producers.
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TRUE
327. Tariffs and import quotas meant to increase domestic employment also eliminate
domestic jobs in export industries.
328. Whenever a foreign producer is selling a product like steel at a lower price than
domestic producers, then dumping is being practiced and must be corrected.
329. The World Trade Organization was established by the United States to force other
nations to open their markets to U.S. goods.
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40-168
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
AACSB: Knowledge Application
A c c e s s i b i l i t y :
Keyboard Navigation
Blooms: Remember
Dif f i c ul t y : 01 Easy
Learning Objective: 40-06 Identify and explain the objectives of GATT, WTO, EU, eurozone,
and NAFTA, and discuss offshoring and trade adjustment assistance.
Test Bank: II
Topic:
Multilateral Trade Agreements and Free-Trade Zones
330. NAFTA is a trade agreement that covers trade between the United States and the
European Union.
331. Bastiat’s "Petition of the Candlemakers," a classic reading in economics, presents a
powerful argument in favor of protectionism.

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