International Trade 2

1. What are the distinctive features of international trade, compared to domestic trade?

• a. The goods and services exchange activities occur among different countries

  
  

• b. The payment involves different currencies, and then exchange rate is important

• c. International trade is riskier and more complex

• d. All are correct

2. Trade surplus occurs when

• a. a country's exports exceed its imports

• b. a country's imports exceed its exports

• c. a country's exports equal its imports

• d. a country experiences a negative balance of trade

3. Gravity model postulates that, other things equal, the ... and the ... the two nations are, the ... the volume of trade between them is expected to be.

• a. smaller, further, larger

• b. larger, closer, larger

• c. larger, further, smaller

• d. smaller, closer, smaller

4. Which of the following is NOT a current development trend of international trade?

• a. Products traded on the world market become more diversified and have shorter life cycles.

• b. The share of agricultural trade has risen on the world marketplace.

• C. The role of trade in services has risen in the international market.

• d. The level of competition among nations and enterprises are getting fiercer.

6. Which of the following will be the lowest barrier on imports of an $800 computer?

• a. a specific $30 tariff

• b. an ad-valorem 5% tariff

• c. a compound duty of $2 and 5%

• d. a compound duty of $5 and 3%

7. Which of the following is NOT the arguments that support free trade?

• a. market failure argument

• b. efficiency argument

• c. rent seeking argument

• d. dynamic benefits argument

8. An important difference between tariffs and quotas is that tariffs

• a. raise the price of the good

• b. generate tax revenue for the government

• c. stimulate international trade

• d. help domestic producers

  
  

9. The difficulties for the General Agreement on Trade and Tariffs (GATT) in the late 1970s and early 1980s was

• a. GATT Scope of trade barriers was wider than the scope of trade barriers in practice

• b. GATT regulated both trade in goods and services while trade in services was not developed in this period

• c. GATT regulated agricultural trade that was sensitive and caused many disputes, thus GATT was inefficient in governing global trade

• d. GATT dispute settlement was not adequate

10. Which of the following is NOT a condition for imposing countervailing duties?

• a. There is a subsidy action

• b. Subsidy margin must be deminimis

• c. Domestic industry suffers from material injury

• d. There if a causal relationship between subsidy action and the material injury to the domestic industry

12. The disappointment with import-substitution policies is in part because

• a. Many countries pursuing this strategy experienced stagnation in their growth.

• b. the rapid and continuous growth record of South American countries.

  
  

• c. this policy is inconsistent with sophisticated economic growth models.

• d. this policy tended to create world-class industrial competitors.