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Exam 6: The Political Economy of International Trade

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Question 21

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What is the ultimate objective of antidumping policies?

A) protect consumers from predatory pricing
B) protect host governments from the loss of legitimate tax revenue
C) protect domestic producers from "unfair" foreign competition
D) protect foreign producers from "unfair" local competition
E) promote "fair" trade

F) A) and B)
G) D) and E)

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Question 22

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What demands that some specific fraction of a good be produced domestically?

A) international content requirement
B) local content requirement
C) specific content requirement
D) ad valorem content requirement
E) WTO local content convention

F) B) and C)
G) All of the above

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Question 23

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Local content regulations have been widely used by __________ to shift their manufacturing base from the simple assembly of products whose parts are manufactured elsewhere into the local manufacture of component parts.

The _____________,which is the latest completed round of the GATT agreement,was launched in 1986 and completed in December 1993.

_______________ tends to be one of the largest beneficiaries of subsidies in most countries.

Both import quotas and VERs benefit ___________ by limiting import competition,but they result in higher prices,which hurts __________.

In 1986 GATT members embarked on their eighth round of negotiations to reduce tariffs.The negotiations were referred to as the _________ Round (so named because they took place in this country) .

The __________ was created to arbitrate trade disputes and monitor the trade policies of member countries as a result of the Uruguay Round agreement.

Tariffs increase the overall efficiency of the world economy because a protective tariff encourages domestic firms to produce products at home,in theory,which could be produced more efficiently abroad.

Bureaucratic rules that are designed to make it difficult for imports to enter a country are referred to as

What economic sector did the WTO tackle first?

One of the most famous examples of a(n) __________ is the limitation on auto exports to the United States enforced by Japanese automobile producers in 1981.

Ad valorem tariffs are levied as a proportion of the value of the imported good.

A study by Japanese economists calculated that tariffs on imports of food,cosmetics and chemicals into Japan cost the average Japanese consumer about how much per year?

__________ status allows countries to export goods to Canada under favorable terms.

In what year was the General Agreement on Tariffs and Trade (GATT) established?

An alleged example of __________ occurred in 1997,when two Korean manufacturers of semiconductors,LG Semicon and Hyundai Electronics,were accused of selling dynamic random access memory chips in the U.S.market at below their costs of production.

As a fairly new Canadian manufacturer of medium and high-end barbeques located in Nova Scotia,you have been under severe price pressure from a Chinese low cost manufacturer.In fact the Chinese manufacturer has been successfully convincing various large retail organizations to order low-end barbeque lines that are specially designed and branded with the retail organizations name.Your company has therefore hired a lobbyist to present your case to the federal government. Your lobbyist is looking for some economic arguments to make in favour of the federal government intervening in this matter.What do you tell her to argue?

The WTO's policing and enforcement mechanisms are having __________ on world trade,according to the textbook.

The World Trade Organization (WTO)was created by the recently completed Uruguay Round of the GATT negotiations.According to the textbook,has the WTO gotten off to a good start or a poor start? Do you believe that the WTO will be effective in the long run? Why or why not?