Which of the following is true regarding the World Trade Organization? It was es

Q: Which of the following is true regarding the World Trade Organization? It was es

1. All of the above as WTO is main trade body All of the above as WTO is main trade body

ID: 1209730 • Letter: W

Question

Which of the following is true regarding the World Trade Organization?

It was established in 1995

It acts as an official body to settle trade disputes between member nations

It oversees the majority of global trade

All of the above

2 points

Question 2

The United States is a highly educated nation; therefore, we can expect it to specialize in the production and export of ________________ products.

High-skill

Manufactured

Low-skill

Agricultural

2 points

Question 3

What would happen if the US reduced tariffs and other barriers to trade in exchange for other nations reducing tariffs and barriers to trade on US electronics and software?

Overall US employment would fall due to job losses in the manufacturing sector

The US economy would weaken

The price of most goods in the US would rise

Employment in the US electronics and software industry would increase

2 points

Question 4

If globally the tariff rate on complex, high-priced goods is less than the overall tariff rate, what will happen?

Developed nations will focus more on producing complex products and high-priced goods

Developing nations will focus more on producing raw materials and low-priced goods

Developing nations will focus more on producing complex products and high-priced goods

None of the above

2 points

Question 5

Tariffs only transfer surplus and create no deadweight losses for an economy

True

False

2 points

Question 6

______________ believed that trade was based on the absolute cost of production, whereas ______________, more correctly, believed that trade was based on the relative cost of production.

Adam Smith; David Ricardo

David Hume; David Ricardo

Adam Smith; David Hume

David Ricardo; Adam Smith

2 points

Question 7

Which of the following is true regarding the World Trade Organization?

It can force member nations to change their laws

It does not authorize retaliatory tariffs

It allows for antidumping laws

All of the above

2 points

Question 8

Outsourcing:

Can reduce cost and increase competitiveness for the outsourcing firm

Can increase costs in the outsourced to country

Harms specific individuals

All of the above

2 points

Question 9

Tariffs have a much stronger impact on trade than quotas do.

True

False

2 points

Question 10

______________ allows for the USITC to create temporary protection (up to four years) of a domestic firm facing immediate import competition after trade negotiations are completed.

The escape clause

Countervailing duties

Antidumping duties

Section 301 of the Trade Act of 1974

2 points

Question 11

Last year in the US consumption totaled $11 trillion, investment totaled $3 trillion, government spending totaled $3 trillion, exports totaled $1.5 trillion, and imports totaled $3.5 trillion. What was the openness of the US for last year (rounded to two decimal places)?

0.14

0.27

0.33

0.43

2 points

Question 12

Which of the following is not a goal of the General Agreement on Tariffs and Trade (GATT)?

Freer trade

Trade without discrimination

Increasing Western imperialism and hegemony

Predictability through binding and transparency

2 points

Question 13

_________________ states that countries tend to base domestic production on domestic demand.

The theory of overlapping demand

Intra-industry specialization

Product life-cycle theory

The theory of comparative advantage

2 points

Question 14

______________ subsidies are given by the government to producers of goods for export, typically agricultural producers.

Import

Export

Competitiveness

2 points

Question 15

Compared to free trade a quota _____________ consumer and producer surplus.

Increases

Decreases

Has no impact on

Eliminates

2 points

Question 16

If the United States, and only the United States, placed economic sanctions on Eretria (a country with little economic and political ties to the US), and the people of Eretria strongly opposed the sanctions politically and culturally, would the sanctions succeed?

Yes

Unable to determine

Maybe?

2 points

Question 17

_________________ states that maintaining comparative advantage is based on continual innovation of new technology or production techniques.

The theory of overlapping demand

Intra-industry specialization

Product life-cycle theory

The theory of comparative advantage

2 points

Question 18

Tariffs transfer consumer surplus to domestic producers and the government.

True

False

2 points

Question 19

If free trade caused a reduction in the size of the US steel industry certain capital, like a steel blast furnace, would represent a large loss of capital due to its inability to be utilized in other domestic industries. The blast furnace is a/an _____________.

Antique

Capital loss

Special factor

None of the above

2 points

Question 20

If trade can occur, America will export ______________ to Wakanda and Wakanda will export _____________ to the US.

Vibranium; Ironsuits

Ironsuits; Vibranium

Trade cannot occur between America and Wakanda

2 points

Question 21

Which of the following sectors does not involve the use of global inputs?

Accounting

Customer service

Manufacturing

None of the above

2 points

Question 22

If the government were to increase taxes on firms in the oil industry, ceteris paribus, what would happen to the equilibrium price and quantity in the oil market?

The equilibrium price would rise and the equilibrium quantity would rise

The equilibrium price would rise and the equilibrium quantity would fall

The equilibrium price would fall and the equilibrium quantity would rise

The equilibrium price would fall and the equilibrium quantity would fall

2 points

Question 23

Domestic content requirements ______________.

Protect domestic jobs to an extent

Drive up the cost of products

Transfer consumer surplus from a large number of consumers to a small number of domestic producers

All of the above

2 points

Question 24

Increased trade has _______________ effect on the level of overall domestic employment.

A positive

A negative

An unkown

2 points

Question 25

Tariffs are applied at a greater rate (level) on luxury items than on basic items.

True

False

2 points

Question 26

If it was discovered that drinking beer everyday cuts the risk of cancer in half, ceteris paribus, what would happen to the equilibrium price and quantity in the beer market?

The equilibrium price would rise and the equilibrium quantity would rise

The equilibrium price would rise and the equilibrium quantity would fall

The equilibrium price would fall and the equilibrium quantity would rise

The equilibrium price would fall and the equilibrium quantity would fall

2 points

Question 27

Consider two countries, Wakanda and America. Both are capable of producing Vibranium and Ironsuits. One Wakandan worker can produce 50 units of Vibranium or 1 Ironsuit per day. One American worker can produce 10 units of Vibranium or 1 Ironsuit per day. America has an absolute advantage in ______________.

Vibranium production

Ironsuit production

Both Vibranium and Ironsuit production

Neither Vibranium nor Ironsuit production

2 points

Question 28

Which of the following is true regarding the third wave of globalization and sets it apart from the previous two waves?

Increases in the speed and capacity of transportation played a major role

Significant growth occurred in developing economies

Global political cooperation played a significant role

Countries specialized in manufacturing specific products

2 points

Question 29

The process of increasing interdependence between the countries of the world and their citizens that consists of increased economic interaction via trade, immigration, foreign investment, culture, and environment is known as ___________.

Economic interdependence

Globulation

Globalization

Ethnocentrism

2 points

Question 30

According to factor endowment theory the direction and nature of trade is determined by ____________.

The relative level of/lack of inputs to production in a given nation

The strength of domestic demand for specific products

The absolute level of/lack of inputs to production in a given nation

Voodoo

2 points

Question 31

$14 trillion

$15 trillion

$16 trillion

$17 trillion

2 points

Question 32

Which of the following is false regarding trade adjustment assistance?

It can be used to provide income support to workers laid off as the result of trade deals

It can be used to provide low-interest loans to firms negatively impacted by trade deals

It can only be used to assist manufacturing and not service industries

It mainly helps older and less educated workers with no experience outside their industry

2 points

Question 33

Tariffs harm exports.

True

False

2 points

Question 34

Consider two countries, Wakanda and America. Both are capable of producing Vibranium and Ironsuits. One Wakandan worker can produce 50 units of Vibranium or 1 Ironsuit per day. One American worker can produce 10 units of Vibranium or 1 Ironsuit per day. Wakanda has a comparative advantage in ______________.

Vibranium production

Ironsuit production

Both Vibranium and Ironsuit production

Neither Vibranium nor Ironsuit production

2 points

Question 35

Which of the following is true?

Trade is a zero-sum game

Trade is based on the law of competitive advantage

America has been losing at trade to China for years

None of the above are true

2 points

Question 36

An import quota that does not specify the point of origin or who can import the product is a _____________ quota.

Global

Selective

Absolute

Tariff-rate

2 points

Question 37

Increased global competition ______________.

Weakens domestic monopolies

Reduces prices

Increases efficiency

All of the above

2 points

Question 38

Tariffs in large nations can impact global prices.

True

False

2 points

Question 39

Tariffs are regressive.

True

False

2 points

Question 40

The General Agreement on Tariffs and Trade (GATT) established _______________ as a replacement for _____________.

Most favored nations; Normal trade relations

Reciprocal trade relations; Most favored nations

Normal trade relations; Most favored nations

Most favored nations; Reciprocal trade relations

2 points

Question 41

According to the Magnification effect:

The owners of abundant domestic resources will experience gains from increased trade

The owners of scarce domestic resources will experience gains from increased trade

The price of scarce domestic resources will fall more than the price of products that use them

The price of scarce domestic resources will fall less than the price of products that use them

2 points

Question 42

The theory of comparative advantage, specifically the assertion that trade depends on relative labor productivity, is empirically valid.

True

False

2 points

Question 43

Which of the following is true regarding the effect of NAFTA and Mexican immigration to the US?

Increased free trade most likely increased the rate of immigration growth

Mexico’s higher birth rate led to increased immigration to the US

The collapse of the peso spurred decreases in immigration to the US

All of the above

2 points

Question 44

Predatory dumping _______________.

Refers to temporarily reducing the price of a good in a foreign market in order to drive out foreign competition

Is illegal under the WTO

Is empirically impossible in the long-run

All of the above

2 points

Question 45

_________________ states that production tends to specialize in the production of specific product subgroups.

The theory of overlapping demand

Intra-industry specialization

Product life-cycle theory

The theory of comparative advantage

2 points

Question 46

Peanut imports are taxed at a rate of $0.0935 per kilogram for the first 30,393 tons of imports, any imports after this level are taxed at an ad valorem rate of 187.9%. This is an example of a _____________ quota.

Global

Selective

Absolute

Tariff-rate

2 points

Question 47

_______________ are an increasingly popular form of trade remedy laws that can be manipulated by industries whenever markets get soft.

The escape clause

Countervailing duties

Antidumping duties

Section 301 of the Trade Act of 1974

2 points

Question 48

Tariffs create overall gains for a nation.

True

False

2 points

Question 49

Which of the following is true regarding antidumping regulations?

They are illegal under the WTO

The USDOC rarely finds that dumping has occurred

The USITC usually finds evidence of material harm

None of the above

2 points

Question 50

Which of the following is responsible for partial specialization existing?

Increasing costs can force the cost basis of two trading nations to converge

Labor union contracts can make a firm responsible for employee benefits long after a plant is shut down

Some products cannot be traded internationally

All of the above

It was established in 1995

It acts as an official body to settle trade disputes between member nations

It oversees the majority of global trade

All of the above

Explanation / Answer

All of the above

as WTO is main trade body

All of the above

as WTO is main trade body

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