Ch 5 Tariffs test

Ch 5 Tariffs test - Chapter 5: Tariffs CHAPTER 5 TARIFFS...

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Chapter 5: Tariffs CHAPTER 5 TARIFFS MULTIPLE-CHOICE QUESTIONS 1. The imposition of tariffs on imports results in deadweight welfare losses for the home economy. These losses consist of the: a. Protective effect plus consumption effect b. Redistribution effect plus revenue effect c. Revenue effect plus protective effect d. Consumption effect plus redistribution effect 2. Suppose that the United States eliminates its tariff on steel imports, permitting foreign-produced steel to enter the U.S. market. Steel prices to U.S. consumers would be expected to: a. Increase, and the foreign demand for U.S. exports would increase b. Decrease, and the foreign demand for U.S. exports would increase c. Increase, and the foreign demand for U.S. exports would decrease d. Decrease, and the foreign demand for U.S. exports would decrease 3. A $100 specific tariff provides home producers more protection from foreign competition when: a. The home market buys cheaper products rather than expensive products b. It is applied to a commodity with many grade variations c. The home demand for a good is elastic with respect to price changes d. It is levied on manufactured goods rather than primary products 4. A lower tariff on imported aluminum would most likely benefit: a. Foreign producers at the expense of domestic consumers b. Domestic manufacturers of aluminum c. Domestic consumers of aluminum d. Workers in the domestic aluminum industry 5. When a government allows raw materials and other intermediate products to enter a country duty free , its tariff policy generally results in a (an): a. Effective tariff rate less than the nominal tariff rate b. Nominal tariff rate less than the effective tariff rate c. Rise in both nominal and effective tariff rates d. Fall in both nominal and effective tariff rates 1
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Chapter 5: Tariffs 6. Of the many arguments in favor of tariffs, the one that has enjoyed the most significant economic justification has been the: a. Infant industry argument b. Cheap foreign labor argument c. Balance of payments argument d. Domestic living standard argument 7. The redistribution effect of an import tariff is the transfer of income from the domestic: a. Producers to domestic buyers of the good b. Buyers to domestic producers of the good c. Buyers to the domestic government d. Government to the domestic buyers 8. Which of the following is true concerning a specific tariff? a. It is exclusively used by the U.S. in its tariff schedules b. It refers to a flat percentage duty applied to a good’s market value c. It is plagued by problems associated with assessing import product values d. It affords less protection to home producers during eras of rising prices 9. The principal benefit of tariff protection goes to: a. Domestic consumers of the good produced b. Domestic producers of the good produced c. Foreign producers of the good produced d. Foreign consumers of the good produced 10. Which of the following policies permits a specified quantity of goods to be imported at one tariff rate and
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Ch 5 Tariffs test - Chapter 5: Tariffs CHAPTER 5 TARIFFS...

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