Quizzes Flashcards
Bureaucratic rules that are designed to make it difficult for imports to enter a country are referred to as:
A. public service intransigence
B. supplemental trade policies
C. Ad valorem trade policies
D. Administrative policies
E. Situational trade policies
D. Administrative trade policies.
According to the strategic trade policy argument, a government should use subsidies to do what?
A. Support large employers
B. Support the import of goods that a country cannot produce domestically
C. Support the export of agricultural products
D. Support promising firms in emerging industries
E. Support established firms in key industries
Support promising firms in emerging industries
By lowering production costs, ________ help domestic producers compete against foreign imports.
A. Ad valorem
B. Tariffs
C. Duties
D. Subsidies
E. Quotas
Subsidies
_________ tends to be one of the largest beneficiaries of subsidies in most countries.
A. Agriculture
B. Commodities
C. Domestic product
D. Technology
E. Consumers
Agriculture
Which of the following is not an example of one of the main instruments in trade policy used by governments around the world?
A. Political mandate
B. Local content requirement
C. Tariffs
D. Subsidies
E. Import quotas
Political Mandate
What is the ultimate objective of anti-dumping policies?
A. Protect domestic producers from unfair foreign competition
B. Protect consumers from predatory pricing
C. Protect host governments from the loss of legitimate tax revenue
D. Promote fair trade
E. Protect foreign producers from unfair local competition
Protect domestic producers from unfair foreign competition
Perhaps the most common political argument for government intervention into the free flow of trade is that
A. It is necessary for protecting jobs and industries from foreign competition.
B. it is important for national security.
C. it protects national pride.
D. is necessary to maintain domestic economic stability.
It is necessary for protecting jobs and industries from foreign competition.
While ________ tariffs are levied as a fixed charge for each unit of a good imported, ________ tariffs are levied as a proportion of the value of the imported good.
A. Ad valorem; special
B. Predatory; percentage
C. General; special
D. Specific; ad valorem
E. Global; special
Specfic; ad valorem
One of the most famous examples of a(n) ________ is the limitation on auto exports to the United States enforced by Japanese automobile producers in 1981.
A. Involuntary import restraint
B. Limited market access
C. Trade reconciliation
D. Referred export restraint
E. Voluntary export restraint
Voluntary export restraint
If Westvaco decided to produce paper in Spain, and the Spanish government stipulated that 50% of the component parts that went into Westvaco’s paper must be produced locally, that requirement would be an example of a(n):
A. Ad valorem content requirement
B. Barter consent
C. Local content requirement
D. International content requirement
E. Specific content requirement
Local content requirement
______ are three main benefits of inward FDI for a host country.
- Resource-transfer effect
- Employment effect
- Balance-of-payments effect
When two or more enterprises encounter each other in different regional markets, national markets, or industries, ________ arises.
A. Multipoint competition
B. A cartel
C. International competition
D. A monopoly
E. An oligopoly
Multipoint competition
Vernon’s theory says that firms invest in a foreign country when:
A. Demand in that country will support local production
B. Demand in that country will support foreign economic conditions
C. Market demand is growing
D. Demand is high and supply is low
E. Demand is high and raw materials in that country can meet production needs
demand in that country will support local production
are knowledge spillovers that occur when companies in the same industry locate in the same area
A. Externalities
B. Inward overflows
C. Cognitive overflows
D. Concentric overflows
E. Synergy
Externalities
FDI is often undertaken as a response to:
A. High GDP levels
B. Exporting
C. Threatened import tariffs
D. FDI inflows
E. FDI outflows
threatened import tariffs
One theory used to explain foreign direct investment patterns is based on the idea that firms follow their domestic competitors overseas. First expounded by ________, this theory has been developed with regard to oligopolistic industries.
F.T. Knickerbocker
High transportation costs and/or tariffs imposed on imports help explain why many firms prefer ________ over ________.
foreign direct investment or licensing; exporting
Host governments use a range of controls to restrict FDI. The two most common are:
A. Foreign corporate tax levies and ownership restraints
B. Monetary restraints and performance requirements
C. Technology transfer restraints and employment restraints
D. Employment restraints and repatriation limitations
E. Ownership restraints and performance requirements
ownership restraints and performance requirements.
The ________ of foreign direct investment refers to the amount of FDI undertaken over a given period (normally a year). The ________ of foreign direct investment refers to the total accumulated value of foreign-owned assets at any time.
flow; stock
The eclectic paradigm has been championed by the British economist ________.
John Dunning
