Government Policy & International Trade

How do subsidies impact domestic producers in terms of competitiveness?

• Decrease competitiveness by increasing cost

• Don't have impact on competitiveness

• Increase competitiveness by reducing cost

• They decrease competitiveness by distorting market price

Import quotas directly restrict:

• Government expenditures

• Consumer choices

• Domestic production

• International trade agreements

What is the primary purpose of tariffs in trade policy?

• Increase government revenue

• Encourage foreign investment

• Promote consumer welfare

• Ensure environmental sustainability

Which industry sectors are typically considered vital for national security, warranting government protection?

• Agriculture and forestry

• Automotive and transportation

• Aerospace and defense

• Healthcare and pharmaceuticals

Which administrative policy is designed to make it challenging for import to enter a country?

• Export subsidies

• Import tariffs

• VER

• Bureaucratic rule

What is the primary goal of export ban in trade policy?

• Increase government revenue

• Stimulate international cooperation

• Reduce domestic production

• Ensure a stable domestic supply of good

How do Ad valorem tariffs differ from specific tariffs?

• Ad valorem tariffs are fixed charges per unit, while specific tariffs are proportion-based

• Ad valorem tariffs are proportion-based, while specific tariffs are fixed charges per unit

• 1. Ad valorem tariffs only apply to certain goods, while specific tariffs apply universally

• Ad valorem tariffs are imposed on luxury goods, while specific tariffs apply to essential items

Dumping in international trade refers to:

• Exporting goods below production costs

• Limiting the quantity of imports

• Subsidizing domestic producers

• Encouraging fair competition

Which instrument of trade policy directly aims to protect domestic producers by limiting foreign competition?

• Export subsidies

• Import quotas

• Voluntary export restraints

• Export bans

What is the rationale behind the Infant Industry Argument for government intervention?

• Provide tax

• To support new industries until they can compete internationally

• Promote free trade agreement

• Protect mature industries