WorksheetsTopic 6 - Political Economy of Trade
Total questions: 10
Worksheet time: 5mins
Why do governments intervene in trade?
To eliminate all import and export activities
To ensure that only large corporations benefit from trade
To protect jobs, preserve national security, and respond to unfair trade practices
To increase reliance on foreign economies
Which of the following is an economic motive for government intervention in trade?
Protecting national security
Promoting cultural identity
Protecting infant industries
Gaining political influence over smaller nations
What is the main purpose of a subsidy?
To make imported products more expensive
To provide financial assistance to domestic producers
To ban the import of certain goods
To impose additional taxes on foreign businesses
Which of the following is a trade restriction instrument?
Export financing
Foreign trade zones
Import tariff
Special government agencies
Which type of tariff is charged as a fixed percentage of an imported product’s price?
Specific tariff
Transit tariff
Ad valorem tariff
Compound tariff
What is the primary function of the World Trade Organization (WTO)?
To regulate exchange rates between countries
To promote and regulate free trade among nations
To set domestic trade policies for individual nations
To impose trade restrictions on developing countries
What is an embargo?
A restriction on the amount of goods that can be imported
A tax on exported goods
A complete ban on trade with a particular country
A government subsidy to domestic industries
Which of the following describes dumping in international trade?
The disposal of excess goods in domestic markets
Exporting products at prices lower than the domestic market price or production cost
Imposing higher tariffs on imported goods
Reducing government intervention in trade
Which agreement was established to promote free trade by reducing tariffs and non-tariff barriers?
The General Agreement on Tariffs and Trade (GATT)
The North American Free Trade Agreement (NAFTA)
The United Nations Economic Agreement
The World Economic Forum
What is a countervailing duty?
A tax imposed on imported products to counteract subsidies given by foreign governments
A tax charged on exports to prevent dumping
A trade agreement to eliminate tariffs between countries
A fee paid by businesses to enter foreign markets
