CH 5 - A State-Centered Approach To Trade Politics

Question 1

Society-centre approach

Answer 1

• a government’s trade policy objectives are shaped by politicians’ responses to interest group’s demands

Question 2

Economies of experience

Answer 2

“Moving down the learning curve” - production cost falls as workers and managers gain the specific skills as a consequence of producing the good

Question 3

Economies of scale

Answer 3

• higher production of goods = lower uni cost of a product.

Question 4

Industrial policy

Answer 4

Government policies are used to channel resources away from certain actors while providing them to industries that the government wishes to promote

Question 5

State strength

Answer 5

The degree to which policymakers are insulated from interest group pressures when making policy decision

Question 6

Rent

Answer 6

Industries earn a higher-than-normal return on an investment, and they pay higher wages to workers than do standard manufacturing industries

Question 7

Strategy trade theory

Answer 7

Government intervention can help domestic firms achieve economies of scale and experience in order to become efficient and competitive in global markets.
-oligopolistic competition

Question 8

Oligopoly

Answer 8

An industry dominated by a small number of firms

Question 9

Infant-industry case for protection

Answer 9

When a country’s newly created firms could not initially compete against foreign producers in an established industry but would be able to do so eventually if they were given time to mature