QAP Flashcards
In the context of free trade, what does the term “comparative advantage” refer to?
a. The balance of trade between two countries
b. The practice of imposing tariffs on all imports
c. The ability of a country to produce all goods domestically without imports
d. The situation where a country specializes in producing goods it can produce most efficiently
d. The situation where a country specializes in producing goods it can produce most efficiently
What does the term “infant industry” refer to in the context of protectionism?
a. Industries that are monopolies in the domestic market
b. Well-established and highly profitable industries
c. Industries that have reached maturity and no longer require government support
d.Emerging and vulnerable industries that need protection from foreign competition
d.Emerging and vulnerable industries that need protection from foreign competition
What is the primary function of the WTO’s Dispute Settlement Body (DSB)?
a. To arbitrate disputes between member countries
b. To provide technical assistance to developing nations
c. To review the WTO’s budget and financial matters
d. To impose trade sanctions on non-compliant members
a. To arbitrate disputes between member countries
What is the primary purpose of a trade embargo?
a. To limit the export of specific goods to certain countries.
b. To encourage trade and economic cooperation with specific nations.
c. To prohibit all trade with a specific country for political or economic reasons.
d. To impose trade restrictions on all countries.
c. To prohibit all trade with a specific country for political or economic reasons.
Which statement is incorrect
a. GATT had a less formal and effective dispute settlement mechanism compared to the WTO. It relied heavily on voluntary negotiations and lacked the binding nature of the WTO’s dispute settlement system.
b. GATT relied on voluntary compliance, and enforcement of its rules and agreements was weaker
c. WTO has the authority to enforce its decisions and agreements. It can authorize the imposition of trade sanctions against member countries that fail to comply with its rulings.
d. The WTO is a non- formal international organization with its own legal framework and a Secretariat to administer its functions.
d. The WTO is a non- formal international organization with its own legal framework and a Secretariat to administer its functions.
Malipayong Buyog, a Filipino Corp. opening restaurants in Singapore is an example of __
a. Vertical FDI
b. Linearforeign direct investment
c. Horizontal FDI
d. Aligned FDI
c. Horizontal FDI
Which of the following is NOT a common feature of FDI?
a. Establishment of a lasting interest in a foreign enterprise
b. Temporary investment for speculative purposes
c. Long-term commitment
d. Transfer of technology and skills
b. Temporary investment for speculative purposes
Which statement that refers to retaliatory tariff
a. can make domestic producers more lethargic and inefficient and unable to face foreign competition in the long run.
b. imposed to protect the home industries from the cut-throat competition from the foreign-produced goods.
c. imposed primarily for generating more revenues for the government
d. imposed tariffs upon the exports from the home country and the latter imposes tariffs against the products of the former.
d. imposed tariffs upon the exports from the home country and the latter imposes tariffs against the products of the former.
What is a countervailing duty (CVD) designed to address?
a. Currency exchange rate fluctuations
d. Unfair trade practices by domestic producers
c. Excessive profits earned by multinational corporations
d. Subsidies given to foreign producers that harm domestic industries
d. Subsidies given to foreign producers that harm domestic industries
What is the primary characteristic of Foreign Direct Investment (FDI)?
a. Portfolio investment in stocks and bonds
b. Ownership and control in a foreign company
c. Short-term capital inflow
d. Government grants for international projects
b. Ownership and control in a foreign company
Which of the following could be defined as a multinational company?
a. A finance company transferring its HQ and all its activities from the UK to the US.
b. A UK-based internet package holiday firm specializing in selling tours to Turkey to German customers
c. A firm that owns shares in a foreign company but does not participate in the company’s decision-making.
d. A firm owns a chain of supermarket outlets outside its country of origin.
d. A firm owns a chain of supermarket outlets outside its country of origin.
International Trade is most likely to generate short-term unemployment in
a.Industries that sell to only foreign buyers
b. Import-competing industries
c. Industries that sell to domestic and foreign buyers
d. Industries in which there are neither import nor export
b. Import-competing industries
What is the argument of John Maynard Keynes?
a. Increase aggregate supply thus raising aggregate demand
b. the cause of a low level of income (GDP) was given the lack of aggregate supply
c. Aggregate demand is equal to consumption and saving
d. the cause of a low level of income (GDP) was given by the lack of aggregate demand
d. the cause of a low level of income (GDP) was given by the lack of aggregate demand
All are objectives of WTO, EXCEPT ONE.
a. make positive efforts designed to ensure that developing countries, especially the least developed.
b. allow for the optimal use of the world’s resources following the objective of sustainable development
c. ensure linkages between trade policies, environmental policies, and sustainable development
d. provides the forum for negotiations among its members concerning their multilateral trade relations
d. provides the forum for negotiations among its members concerning their multilateral trade relations
According to the theory of comparative advantage, which of the following is NOT a reason why countries trade?
a. Exports give a country a political advantage over other countries that export less.
b. Costs are higher in one country than in another
c. The productivity of labor differs across countries and industries
d. Prices are lower in one country than in another
a. Exports give a country a political advantage over other countries that export less.
