IBC Chapter 7

Governments impose trade barriers for all of the following reasons EXCEPT ________.

• to protect national security

• to gain influence over other nations

• to respond to other nation’s fair trade practices

• to protect jobs

Which of the following is a political motive behind government intervention in trade?

• Promote a strategic trade policy

• Gain influence over other nations

• Protect national identity

• Protect young industries from competition

Which of the following is an economic motive for nations’ attempts to influence international trade?

• Pursue strategic trade policy

• Protect jobs

• Respond to “unfair” trade

• Preserve national security

________ believe that government intervention can help companies take advantage of economies of scale and be the first movers in their industries.

• Opponents of globalization

• New trade theorists

• Critics of strategic trade policy

• Cultural imperialists

All of the following are methods of restricting trade EXCEPT ________.

• tariff

• quota

• local content requirement

• subsidy

A designated geographic region in which merchandise is allowed to pass through with lower custom duties and/or fewer customs procedures is called a(n) ________.

• chaebol zone

• special subsidy zone

• international customs zone

• foreign trade zone

A restriction on the amount of a good that can enter or leave a country during a certain period of time is called a(n) ________.

• export subsidy

• local content requirement

• quota

• tariff

Suppose imports entering a nation under a quota limit of 8,500 tons of rice are charged a tariff of 15 percent, but subsequent imports of rice that do not make it under this quota limit are charged a tariff of 68 percent. This is an example of a(n) ________

• import subsidy

• arbitrary will of the government

• GATT-enforced regulation

• tariff-quota

Purposely understaffing customs offices to cause time delays, requiring special licenses that take a long time to obtain, and requiring air carriers to land at inconvenient airports are all examples of ________.

• time delays

• local bureaucracy

• administrative delays

• global strategy failures

An additional tariff placed on an imported product that a nation believes is receiving an unfair subsidy is called a(n) ________.

• countervailing duty

• ad valorem duty

• dumping duty

• compounded tariff