Chapter 6 Nontariff Trade Barriers test

Chapter 6 Nontariff Trade Barriers test - Chapter 6:...

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Chapter 6: Nontariff Trade Barriers CHAPTER 6 NONTARIFF TRADE BARRIERS MULTIPLE-CHOICE QUESTIONS 1. The imposition of a tariff on imported steel for the home country results in: a. Improving terms of trade and rising volume of trade b. Higher steel prices and falling steel consumption c. Lower profits for domestic steel companies d. Higher unemployment for domestic steel workers 2. Which of the following refers to a market-sharing pact negotiated by trading partners to moderate the intensity of international competition? a. Orderly marketing agreement b. Local content requirements c. Import quota d. Trigger price mechanism 3. Suppose the United States and Japan enter into a voluntary export agreement in which Japan imposes an export quota on its automakers. The largest share of the export quota’s “revenue effect” would tend to be captured by: a. The U.S. government b. Japanese automakers c. American auto consumers d. American autoworkers 4. Suppose the government grants a subsidy to domestic producers of an import-competing good. The subsidy tends to result in deadweight losses for the domestic economy in the form of the: a. Consumption effect b. Redistribution effect c. Revenue effect d. Protective effect 1
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Chapter 6: Nontariff Trade Barriers 5. Tariffs and quotas on imports tend to involve larger sacrifices in national welfare than would occur under domestic subsidies. This is because, unlike domestic subsidies, import tariffs and quotas: a. Permit less efficient home production b. Distort choices for domestic consumers c. Result in higher tax rates for domestic residents d. Redistribute revenue from domestic producers to consumers 6. Suppose the government grants a subsidy to its export firms that permits them to charge lower prices on goods sold abroad. The export revenue of these firms would rise if the foreign demand is: a. Elastic in response to the price reduction b. Inelastic in response to the price reduction c. Unit elastic in response to the price reduction d. None of the above 7. Because export subsidies tend to result in domestic exporters charging lower prices on their goods sold overseas, the home country’s: a. Export revenues will decrease b. Export revenues will rise c. Terms of trade will worsen d. Terms of trade will improve 8. Which trade restriction stipulates the percentage of a product’s total value that must be produced domestically in order for that product to be sold domestically? a. Import quota b. Orderly marketing agreement c. Local content requirement d. Government procurement policy 9. The imposition of a domestic content requirement by the United States would cause consumer surplus for Americans to: a. Rise b. Fall c. Remain unchanged d. None of the above 10. Domestic content legislation applied to autos would tend to: a. Support wage levels of American autoworkers b. Lower auto prices for American autoworkers c. Encourage American automakers to locate production overseas d. Increase profits of American auto companies
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Chapter 6 Nontariff Trade Barriers test - Chapter 6:...

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