A) that such protection hurts the protecting country's balance of payments B) in times of military emergency, almost any product could be considered essential C) other countries find supplies elsewhere D) unemployment increases in the protecting country Answer: B Diff: 2 Skill: Concept Objective: 3 39) Defense arguments are sometimes used to prevent exports to unfriendly countries. This runs the risk of the targeted country ________. A) becoming politically destabilized B) removing import restrictions C) finding alternative sources of supply D) banding with other countries to form a cartel Answer: C Diff: 2 Learning Outcome: Discuss arguments for and against government intervention in international business Skill: Concept Objective: 3 40) What is the main motive for countries' protection of their film/cinema industries? A) to keep prices low for their citizens B) to improve their balance of payments C) to diversify their economies D) to maintain their cultural sovereignty Answer: D Diff: 2 Skill: Concept Objective: 3
41) The most common type of tariff is the ________ tariff. A) export B) import C) transit D) ad valorem Answer: B Diff: 1 Skill: Concept Objective: 4 42) An import tariff may be protective ________. A) only if it is on imports the country produces domestically B) if it serves primarily to restrict entry of hazardous materials C) if it does not generate significant tax revenue for essential industries D) even though the importing country does not produce the product Answer: D Diff: 2 Skill: Concept Objective: 4 43) In addition to protection, tariffs serve to ________. A) generate revenue B) subsidize exports C) subsidize imports D) increase consumption Answer: A Diff: 2 Skill: Concept Objective: 4 44) Which term refers to a tariff or duty assessed as a percentage of an item's value? A) specific duty B) effective tariff C) ad valorem duty D) compound tariff Answer: C Diff: 1 Skill: Concept Objective: 4
45) What is the primary difficulty associated with dismantling developed countries' agricultural subsidies? A) Rural areas in the United States, the European Union, and Japan are disproportionately represented in their governments. B) Developing countries put pressure on developed countries to maintain the subsidies so that they receive food products at a lower price. C) The subsidies are used to counter the commodity agreements set up mainly by developing countries. D) The subsidies are at the consumer, rather than producer, level, and everyone benefits from the lower prices. Answer: A Diff: 3 Learning Outcome: Discuss arguments for and against government intervention in international business Skill: Concept Objective: 4
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