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66) Strategic trade policy suggests that in industries where the existence of substantial scale
economies implies that the world will profitably support only a few firms, countries may
predominate in the export of certain products simply because they had firms that were able to
A) influence the assignment of tariffs.
B) receive government subsidies.
C) capture first-mover advantages.
D) capitalize on late-mover advantages.
67) Economist Paul Krugman has suggested that trade policy designed to retaliate against another
country's trade policy would
A) benefit the multinational firms of both countries.
B) benefit the citizens of both countries.
C) hurt the multinational firms of both countries.
D) hurt the citizens of both countries.
68) Economist Paul Krugman suggests that strategic trade policy aimed at establishing domestic
firms in a dominant position in a global industry is a beggar-thy-neighbor policy that
A) provides enhanced protection for intellectual property of those firms.
B) boosts national income at the expense of other countries.
C) reduces domestic agricultural profits.
D) depletes national income to the benefit of other countries.
69) Economic problems during the Great Depression were compounded in 1930 when the U.S.
Congress passed the ________, aimed at avoiding rising unemployment by protecting domestic
industries and diverting consumer demand away from foreign products.
A) Smoot-Hawley Act
B) Antidumping Act
C) Helms-Burton Act
D) D'Amato Act
70) Free trade as a government policy was first officially embraced by Great Britain in 1846, when
the British Parliament repealed a law that placed a high tariff on
A) all agricultural products.
B) wheat.
C) textiles.
D) corn.
71) The Smoot-Hawley Act was aimed at
A) diverting consumer demand toward foreign products.
B) promoting unrestricted free trade.
C) limiting global warming.
D) avoiding rising unemployment.
72) What was the result of the Smoot-Hawley Act?
A) Other countries reacted by raising their own tariff barriers.
B) Other countries reacted by lowering their trade barriers.
C) U.S. exports increased.
D) The United States began to get out of the Great Depression.
73) Which of the following is a reason for the pressure for greater protectionism that occurred
during the 1980s and early 1990s?
A) The U.S. Congress erected an enormous wall of tariff barriers.
B) Japanese economic failure strained the world trading system.
C) The persistent trade surplus in the United States strained the world trading system.
D) Many countries found ways to get around GATT regulations.
74) Until 1995, GATT rules applied only to
A) services.
B) industrial goods.
C) textiles.
D) agricultural products.
75) According to the 1986 Uruguay Round, the ________ was to be created to implement the
GATT agreement.
A) World Trade Organization
B) International Monetary Fund
C) United Nations
D) World Bank
76) After the Uruguay Round of GATT negotiations extended global trading rules to cover trade in
services, the first two industries targeted for reform by the WTO were
A) textiles and technology.
B) telecommunications and financial services.
C) automotive and aerospace.
D) agriculture and consulting services.
77) The WTO argues that removing tariff barriers and subsidies in the agricultural sector could
A) protect domestic agriculture in developed nations.
B) lower the overall level of agricultural trade.
C) restrict global economic growth.
D) lower prices to consumers.
78) The TRIPS regulations established at the 1995 Uruguay Round
B) set a new level of agriculture subsidies.
C) organized OECD countries to eliminate tariffs on textiles.
D) established new tariff levels on technology.
79) TRIPS regulations oblige WTO members to
A) grant and enforce patents lasting at least 100 years.
C) comply with the rules within five years in the case of the rich countries.
D) comply with the rules within 10 years in the case of the poorest countries.
80) ________ are the highest rate that can be charged, which is often, but not always, the rate that
is charged.
A) Ad valorem tariff rates
B) Tariff rents
C) Specific tariff rates
D) Bound tariff rates
81) The WTO's GATS has taken the lead in
A) providing enhanced protection for intellectual property.
B) extending free trade agreements to services.
C) reducing agricultural subsidies.
D) enforcing GATT rules.
82) Tariff rates on agricultural products are generally
A) much lower than tariff rates on manufactured products or services.
B) much lower than import fees on electronics.
C) much higher than tariff rates on manufactured products or services.
D) much higher than import fees on electronics.
83) One issue at the forefront of the current agenda of the WTO is the
A) decrease in antidumping policies.
B) low level of protectionism in agriculture.
C) strong protection for intellectual property rights in many nations.
D) continued high tariff rates on nonagricultural goods and services in many nations.
84) WTO rules allow countries to ________ foreign goods that are being sold cheaper than at
home, or below their cost of production, when domestic producers can show that they are being
harmed.
A) impose antidumping duties on
B) subsidize
C) lower the import quota on
D) place countervailing duties on
85) The ________ raised tariff barriers in the hope of protecting jobs and diverting consumer
demand away from foreign products.
A) Smoot-Hawley Act
B) Helms-Burton Act
C) General Agreement on Tariffs and Trade
D) Buy America Act
