Chapter 8 - Government Intervention In International Business

Question 1

Protectionism

Answer 1

National economic policies designed to restrict free trade and protect domestic industries from foreign competition

Question 2

Tariff

Answer 2

A tax imposed on imported products, effectively increasing the cost of acquisition for the customer

Question 3

Non-Tariff Trade Barrier

Answer 3

A government policy, regulation or procedure that impedes trade through means other than explicit tariffs

Question 4

Customs

Answer 4

Checkpoints at the ports of entry in each country where government officials inspect imported products and levy tariffs

Question 5

Quota

Answer 5

A quantitative restriction placed on imports of a specific product over a specified period of time

Question 6

Countervailing Duty

Answer 6

A duty imposed on products imported into the country to offset subsidies given to producers or exporters in the exporting country

Question 7

Export Control

Answer 7

A government Measure intended to manage or prevent the export of certain products or trade with certain countries

Question 8

Import Licence

Answer 8

Government authorisation granted to a firm for the importation of a product

Question 9

Currency Control

Answer 9

Restrictions on the outflow of hard currency from a country, or the inflow of foreign currencies

Question 10

Subsidy

Answer 10

Monetary or other resources that a government grants to a firm or a group of firms, usually intended to ensure their survival by facilitating the production and marketing of products at reduced prices, or to encourage exports

Question 11

Dumping

Answer 11

Pricing exported products at less than their normal value, generally for less than their price in the domestic or third-country markets, or at less than production cost

Question 12

Anti-Dumping Duty

Answer 12

A tax imposed on products deemed to be dumped and causing injury to producers of competing products in the importing country

Question 13

Investment Incentive

Answer 13

A transfer payment or tax made directly to foreign firms in order to entice them to invest in the country

Question 14

Foreign Trade Zone FTZ

Answer 14

An area within a country that receives imported goods for assembly, or other processing, and re-export.
For customs purposes, treated as if it is outside the country’s borders

Question 15

Maquiladoras

Answer 15

Export-assembly plants in Northern Mexico along the US border that produce components and typically finished products destined for the United States