International Economics Questions

Which of the following strategies was employed by the United States to regain its lost market share for capital goods by the late 1990s? A. Funding the communist nationsB. Restructuring its industries to be more lean and meanC. Decreasing its exports and increasing its importsD. Raising average U.S. tariffs on more than 20,000 imported goods by 60%E. Provoking increased protectionism from other countries

The fundamental difference between quotas and import licenses as a means of controlling imports is that: A. import licenses have greater flexibility over quotas.B. quotas impose specific limitations on trade, and import licenses take care of standards.C. quotas are imposed on export goods, and import licenses are imposed on import goods.D. for quotas, the exporting country sets the limits, but licenses are issued by the importing country.E. unlike licenses, quotas limit quantities on a case-by-case basis.

Which of the following statements is true of the General Agreement on Tariffs and Trade (GATT)? A. The United States, the United Kingdom, and Germany were the only signatories of the original GATT.B. The original agreement provided a process to increase the tariffs on trade goods.C. GATT member nations seek to resolve their trade disputes unilaterally.D. The GATT panels have enforcement powers apart from advisory powers.E. It created an agency to serve as watchdog over world trade.

In the context of monetary barriers, blockage is ideally accomplished when: A. a country refuses to allow an importer to exchange its national currency for the country's currency.B. two countries enter into a voluntary agreement to determine the value of their currencies.C. a country applies a specific unit or dollar limit to a particular type of good.D. money dealers limit the rate at which foreign currencies are exchanged.E. the government of a country imposes a mandatory tax on goods entering at its borders.

Exporting countries primarily agree to voluntary export restraints (VERs) to: A. minimize exposure in the importing country.B. reduce market competitiveness.C. avoid stiffer quotas being set by the importing country.D. take over local industries of the importing country.E. avoid criminal prosecution.

Which of the following institutions emerged as a successor to the GATT following the Uruguay Round of GATT negotiations? A. International Monetary FundB. World BankC. European Services ForumD. World Trade OrganizationE. Association of Southeast Asian Nations

One country refuses to sell goods to its neighboring country based on the belief that the neighboring country harbors radicals and terrorists. In this case, the refusal is most accurately referred to as a(n): A. antidumping penalty.B. embargo.C. monetary barrier.D. orderly market agreement.E. voluntary export restraint.

Which of the following accounts of the balance-of-payments statement is a record of the direct investment, portfolio investment, and short-term movement of cash and technology to and from countries? A. Current accountB. Capital accountC. Credit accountD. Receivables accountE. Reserves account

A specific unit or dollar limit applied to a particular type of good is called a(n): A. trade license.B. quota.C. asterisk bill.D. predatory price.E. exchange rate.

In order to effectively secure foreign exchange, which of the following is most likely to be used by countries experiencing severe shortages of foreign exchange? A. PrivatizationB. Government approvalC. Spot pricingD. Voluntary export restrictionE. Monopoly

In the context of nontariff barriers, antidumping practices fall under the category of: A. specific limitations on trade.B. customs and administrative entry procedures.C. standards.D. governmental participation in trade.E. charges on imports.

An agreement signed willingly between the importing country and the exporting country for a restriction on the volume of exports is called a: A. monetary barrier.B. tariff restraint.C. voluntary export restraint.D. special interests' privilege.E. balance-of-payments statement.

Which of the following is one of the four ongoing activities supporting the growth of international trade? A. Warsaw PactB. Kyoto ProtocolC. International Monetary FundD. World Summit on Sustainable DevelopmentE. Treaty of Waitangi

Which of the following arguments regarding the need for protectionism is recognized by economists as valid? A. Need to keep money at homeB. Encouragement of capital accumulationC. Industrialization of underdeveloped countriesD. Conservation of natural resourcesE. Maintenance of employment and reduction of unemployment

Which of the following statements is true of tariffs? A. They strengthen balance-of-payments positions.B. They strengthen supply-and-demand patterns.C. They increase special interests' privileges.D. They strengthen international relations.E. They promote competition.

Which of the following statements is true of the balance-of-payments records? A. The balance-of-payments accounts do not consider income brought in by nonresident citizens of a country.B. The fact that assets and liabilities balanced in a balance-of-payments statement does not mean that a nation is in a particularly good financial condition.C. A balance of payments is not a record of the financial condition of a nation.D. A balance of payments is a good determinant of the financial condition of a nation.E. A balance-of-payments record is maintained on a single-entry bookkeeping system.

Which of the following ensures that balance-of-payments records are always in balance? A. Sum of squares recording systemB. Bank reconciliation systemC. Double-entry bookkeeping systemD. Archival records systemE. Multifactor recording system

In general, tariffs weaken: A. inflationary pressures.B. special interests' privileges.C. balance-of-payments positions.D. government control in economic matters.E. the number of reciprocal tariffs by other countries.

Randall, a protectionist, has seen several small businesses go bankrupt because they were unable to compete with the cheaper prices of goods provided by foreign companies. The cell-phone manufacturing industry has just started in the United Kingdom, and Randall's company is one of the first to try its hand at cell-phone manufacturing. Which of the following arguments is most likely to be used by Randall to persuade his government to restrict the import of foreign cell phones from foreign companies? A. Protection of an infant industryB. The need to keep money at homeC. Conservation of natural resourcesD. National defenseE. Maintenance of standard of living

In general, tariffs restrict: A. inflationary pressures.B. special interests' privileges.C. government control in economic matters.D. the number of reciprocal tariffs.E. manufacturers' supply sources.