Chapter 6 Flashcards
No country in the world permits what?
Completely unregulated flow of goods and services across its border; essentially completely free trade
What is the effect of retaliation on the employment market?
It’s difficult to determine due to the likelihood of retaliation and the fact that both imports and exports create jobs
Due to changes in trade policy, policy-makers continue to struggle with the problem of what?
Income redistribution
What argument holds that governmental prevention of import competition is necessary to help certain industries evolve from high-cost to low-cost production?
The infant-industry argument for protection
Government is often argued to be beneficial if it does what? Why?
Promotes industrialization, given the positive relationship between industrial activity and certain economic objectives
Trade controls to improve economic relations with other countries include what?
Objectives of improving the balance of payments, raising prices to foreign consumers, gaining comparable access to foreign markets, preventing foreign monopoly prices, assuring that domestic consumers get low prices, and shifting revenue from foreign producers to domestic tax receipts
Considerable government interference in international trade is motivated by what?
Political, not economic, concerns, including maintaining domestic supplies of essential goods and preventing potential supplies of essential goods and preventing potential enemies form gaining goods that would help them achieve their objectives
Trade controls that directly affect price and indirectly affect quantity include what?
Tariffs, subsidies, arbitrary customs valuation methods, and special fees
Trade controls that directly affect quantity and indirectly affect price include what?
Quotas, VERs, “buy local” legislation, arbitrary standards, licensing arrangements, foreign-exchange controls, administrative delays, and reciprocal requirements
A company’s development of an international strategy will greatly determine what?
Whether it will benefit more from protectionism or from some other means for countering international competition
Changing trade agreements and the advent of new products create what?
Complexities for both companies and governments as they plan their policies
This argument presumes that the unregulated importation of lower-priced manufacturers prevents the development of a domestic industry:
Industrialization argument
Type of development when some countries have achieved rapid economic growth by promoting the development of industries with export potential
Export-led development
This argument, which holds that companies are entitled to the same foreign markets as foreign industries and companies have to theirs, is called what?
Comparable access argument
Occurs when companies sometimes export below cost or below their home-country price
Dumping
