4.4-Trade Policies and Negotiations Flashcards
What is a trade policy?
A trade policy is a government’s approach to regulating international trade, including tariffs, trade agreements, and import/export restrictions.
True or False: Trade policies can only benefit the exporting country.
False
Fill in the blank: A ________ is a tax imposed on imported goods to increase their price and reduce competition with domestic products.
tariff
What is the purpose of trade negotiations?
The purpose of trade negotiations is to establish agreements that facilitate international trade by reducing barriers and improving trade relations.
Multiple Choice: Which of the following is a non-tariff barrier to trade? A) Quotas B) Tariffs C) Subsidies D) All of the above
D) All of the above
What is a quota in trade policy?
A quota is a limit on the quantity of a specific good that can be imported or exported during a given time period.
True or False: Free trade agreements eliminate tariffs between member countries.
True
What is the World Trade Organization (WTO)?
The WTO is an international organization that regulates and facilitates international trade agreements and resolves trade disputes.
Fill in the blank: The ________ effect occurs when a country’s exports increase due to a favorable trade agreement.
export
What is a trade deficit?
A trade deficit occurs when a country’s imports exceed its exports.
Multiple Choice: Which of the following is a potential benefit of trade policies? A) Increased competition B) Higher prices for consumers C) Trade imbalances D) None of the above
A) Increased competition
What does the term ‘protectionism’ refer to?
Protectionism refers to government policies that restrict international trade to protect domestic industries from foreign competition.
True or False: Tariffs can lead to retaliation from trading partners.
True
What is an example of a trade agreement?
An example of a trade agreement is the North American Free Trade Agreement (NAFTA).
Fill in the blank: A ________ is a financial aid provided by the government to local businesses to make them more competitive against foreign imports.
subsidy
What is the main goal of a bilateral trade agreement?
The main goal of a bilateral trade agreement is to enhance trade relations between two countries by reducing trade barriers.
Multiple Choice: Which of the following can be a consequence of trade barriers? A) Reduced consumer choice B) Lower prices for goods C) Increased efficiency D) Economic growth
A) Reduced consumer choice
What is meant by ‘comparative advantage’?
Comparative advantage refers to the ability of a country to produce a good at a lower opportunity cost than another country.
True or False: Trade liberalization generally leads to increased economic growth.
True
What is an export subsidy?
An export subsidy is a government payment to a domestic producer to encourage the export of goods.
Fill in the blank: A ________ is an agreement between two or more countries to reduce tariffs and trade barriers.
free trade agreement
What does ‘dumping’ refer to in international trade?
Dumping refers to the practice of selling a product in a foreign market at a price lower than its production cost.
Multiple Choice: Which of the following is NOT a goal of trade policy? A) Protect domestic jobs B) Increase tariffs C) Promote economic growth D) Enhance international relations
B) Increase tariffs
What is the significance of the General Agreement on Tariffs and Trade (GATT)?
GATT was established to create a framework for international trade negotiations and to reduce tariffs and other trade barriers.
