Global business today by charles wl hill 7th edition

True False The Smoot-Hawley Act was a multilateral agreement whose objective was to liberalize trade by eliminating tariffs, subsidies, and import quotas. True False The United States wanted the WTO to allow governments to impose tariffs on goods imported from countries that did not abide by what the United States saw as fair labor practices during a WTO meeting at the end of November True False Antidumping actions seem to be concentrated in certain sectors of the economy such as basic metal industries e.

True False The biggest defenders of agricultural subsidies are the developed nations of the world. True False The threat of antidumping action enhances the ability of a firm to use aggressive pricing to gain market share in a country.

True False Government intervention may invite retaliation and trigger a trade war. True False Multiple Choice Questions Which of the following is one of the seven main instruments utilized in trade policy? Local content requirements B. Licensing C. Foreign direct investment D. Government and producers B. Consumers and trade associations C.

Exporters and importers D. Producers and foreign competitors A protective tariff encourages domestic firms to produce products at home that, in theory, could be produced more efficiently abroad. This results in: A. The U. This belongs to which of the following categories? General B. Ad valorem C. Specific D. Ad hoc Tariffs: A. One of the objectives of export tariffs is to: A. Which of the following is a government payment to a domestic producer?

Duty B. Subsidy C. Quota D. Ad valorem tariffs B. Subsidies C. Quota rents D. Specific tariffs By lowering production costs, subsidies help domestic producers in: A. Banks B. Commercial airlines C. Agriculture D. Governments B. Consumers C. Domestic producers D. The MFA is an example of: A. The extra profit that producers make when supply is artificially limited by an import quota is referred to as a: A.

Export Administration Act B. Helms-Burton Act C. Hawley-Burton Act D. Buy America Act In addition to the formal instruments of trade policy, informal bureaucratic rules that are designed to make it difficult for imports to enter a country are referred to as: A.

At one time, the French government required that all imported videotape recorders arrive in France through a small customs entry point that was both remote and poorly staffed. This is an example of a n : A. Punitive damages B. Civil duties C. Import damages D. In the context of dumping, predatory behavior can be described as foreign producers: A.

One of the motives for foreign firms engaged in dumping may be: A. Economic Offences Wing and Conciliation Services. International Trade Commission and the Industry Council. Commerce Department and the International Trade Commission. Federal Trade Commission and the Economic Council.

Which of the following is considered to be the ultimate objective of antidumping policies? Protect consumers from competitive pricing B. Prevent domestic firms from unloading their excess production in domestic markets C. Protect domestic producers from unfair foreign competition D.

Protect consumers from substandard and hazardous products In general, what are the two paths of arguments for government intervention into the free flow of trade? Political and cultural B. Economic and legal C. Political and economic D. Economic B. Political C. Legal D. Commercial Which of the following is perhaps the most common political argument for government intervention into the free flow of trade?

Protecting national identity B. Protecting national sovereignty from being usurped by supranational organizations C. Protecting jobs and industries from unfair foreign competition D.

Improving efficiency of domestic labor At times, countries contend that it is necessary to protect industries such as those related to defense—aerospace, advanced electronics, and semiconductors—because these industries are important for: A. It may liberalize trade and bring with it resulting economic gains.

A country that is being pressured may respond by raising trade barriers of its own. It may expose certain industries that are important for national security to foreign competition. It allows firms to sell goods in foreign market at below their fair market value. In , several countries of the European Union and U. The underlying motive for such a move could be: A.

Which of the following would be a likely action motivated by the desire of governments to protect their consumers from unsafe products? Placing tariffs on imports of foreign steel, by the Bush administration in B. Threatening percent tariffs on a range of Chinese products violating intellectual property laws C.

Outlawing importation, sale, or use of genetically modified organisms by Austria and Luxembourg D. Enforcing tougher intellectual property regulations C. Threatening high tariffs and quotas D. Limiting or banning imports of unsafe or substandard products U. Legislation that allows Americans to sue foreign firms that use property in Cuba confiscated from them after the revolution is known as the: A. Frederick-Peterson Act. Perkins-Dole Act. Helms-Burton Act.

Which one of the following Acts represents U. Williams Act D. Most favored nation B. Preferred trade partner C. Strategic ally D. Important exceptions to this trend are: A. Which of the following is one of the reasons offered to explain the high levels of carbon dioxide emissions in developed countries like the U.

Richer societies are more energy intensive and use carbon dioxide rich hydrocarbons extensively. Developed countries tend to be more densely populated than other countries and hence reflect higher carbon dioxide emissions.

Companies in developed countries are less likely to take up social responsibility initiatives than those in developing countries.

Developed countries generally have environmental pollution regulations less stringent than those in developing countries. Labor productivity B. Transportation costs C. Pollution abatement costs D. Impoverished industry argument B. Infant industry argument C. Sick industry argument D.

GATT B. North Atlantic Treaty Organization C. United Nations D. International Monetary Fund One of the main reasons why many economists remain critical of the infant industry argument is its assumption that: A. Protection of manufacturing from foreign competition does no good unless the protection: A. The strategic trade policy arguments of the new trade theorists challenge the rationale for unrestricted free trade found in the work of classic trade theorists.

In response to this challenge to economic orthodoxy, a number of economists—including some of those responsible for the development of the new trade theory, such as Paul Krugman are: A. According to Paul Krugman, a country that attempts to use strategic trade policy to establish a domestic firm in a dominant position in a global industry will probably: A. According to Krugman, one of the reasons for not embracing strategic trade policy is that such a policy might: A.

Which of the following historical events signified the first official embracing of free trade as a government policy by Great Britain? The Union of the Crowns in B. The Treaty of American Independence in D. The Industrial Revolution of the 18 th and 19 th centuries Which of the following represents the reason for the British Parliament repealing the Corn Laws in ?

Opium wars that polarized world opinion against Great Britain B. Prospect of harvest failure in Britain and famine in Ireland C. Imminent threat of rebellions in most of its colonies D. Labor party taking over the government from the Liberal Conservatives According to the text, the only reason Great Britain pushed the case for trade liberalization for as long as 80 years in the 19 th century was that: A.

First World War B. Smoot-Hawley Act B. Helms-Burton Act D. GATT attempted to liberalize trade restrictions in one go. GATT regulations failed as they were enforced by an unshared monitoring mechanism. Tariff reductions through negotiations were spread over eight rounds. One of the reasons that protectionist pressures arose around the world during the s was: A. Voluntary export restraint B.

Import quota C. Specific tariff D. The main effect of the Uruguay Round Agreement on agricultural products was that: A. Which of the following has taken over responsibility to arbitrate trade disputes and monitor the trade policies of member countries and resulted because of the Uruguay Round agreement?

World Bank B. World Trade Organization C. International Trade Commission D. International Court of Justice D. Security Council The millennium round of talks of WTO attempted to get the assembled countries to agree to work toward: A. Two of the first industries targeted for reform by the WTO with a view to encompass regulations governing foreign direct investment were: A. Which of the following countries, with minor exceptions, is fully open to inward investment by foreign banks, insurance, and security companies?

Russia B. Cuba C. Venezuela D. They clear distortions in the production and international trade of agricultural products. They encourage countries to overproduce heavily subsidized agricultural products. They reduce international trade in agricultural products. They raise the prices of agricultural products to consumers.

Ceiling rates B. Specific tariffs C. Bound tariff rates D. Ad maximum rates Which of the following has been excluded from the agenda for the Doha round of WTO talks that began in ?

Reducing barriers to cross-border investment B. Phasing out subsidies to agricultural producers C. Limiting the use of antidumping laws D. Attempts to tie trade to labor standards in a country The threat of antidumping action limits the ability of a firm to: A. Describe the difference between specific tariffs and ad valorem tariffs, illustrating each with an example.

Who gains and who loses from the imposition of a tariff on imported goods? How can it be determined whether the net gain from the tariff exceeds the net loss?

What is a subsidy? Provide some examples of the forms that subsidies take. How do subsidies help domestic producers? What is a voluntary export restraint? Why do exporting countries agree to VERs? Explain with an example. What is local content requirement? How can local content requirements typically be expressed? How have local content requirements been used as trade barriers? What are the principle political arguments for government intervention into international trade?

Describe briefly, with examples, the use of trade policies by governments to support their foreign policy objectives. What are its implications for the world economy? What are the criticisms of this argument? Briefly describe the implications of the strategic trade policy as applied to international trade. Give a brief description of the origin, functions, and successes of GATT from to , before protectionist trends gained momentum across the world. Describe how the world trade system erected by GATT came under strain from protectionist trends that dominated the world economy from to State the provisions that were formed after the completion of the Uruguay Round of talks.

Explain the organizational structure of the WTO and mention the functions of its key organs. Why is the WTO meeting in Seattle considered a watershed? List the fours issues at the forefront of the current agenda of the WTO. TRUE Trade policy uses seven main instruments: tariffs, subsidies, import quotas, voluntary export restraints, local content requirements, administrative policies, and antidumping duties.

FALSE A fall in tariff barriers in recent decades has been accompanied by a rise in nontariff barriers, such as subsidies, quotas, voluntary export restraints, and antidumping duties. TRUE A fall in tariff barriers in recent decades has been accompanied by a rise in nontariff barriers, such as subsidies, quotas, voluntary export restraints, and antidumping duties.

FALSE Tariffs, specific and ad valorem, are placed on imports to protect domestic producers from foreign competition by raising the price of imported goods. TRUE Tariffs are pro-producer and anti-consumer. FALSE Import tariffs reduce the overall efficiency of the world economy because a protective tariff encourages domestic firms to produce products at home that, in theory, could be produced more efficiently abroad.

TRUE Sometimes tariffs are levied on exports of a product from a country. FALSE The main gains from subsidies accrue to domestic producers, whose international competitiveness is increased as a result.

TRUE Agriculture tends to be one of the largest beneficiaries of subsidies in most countries. FALSE An import quota is a direct restriction on the quantity of some good that may be imported into a country.

TRUE A little-known law in the United States, the Buy America Act, specifies that government agencies must give preference to American products when putting contracts for equipment out to bid unless the foreign products have a significant price advantage. FALSE In addition to the formal instruments of trade policy, governments of all types sometimes use informal or administrative policies to restrict imports and boost exports.

TRUE Countries sometimes argue that it is necessary to protect certain industries because they are important for national security. FALSE Empirical evidence suggests the relationship between income levels and pollution is not a linear one—rather it is an inverted U-shaped relationship. TRUE The infant industry argument is by far the oldest economic argument for government intervention. TRUE Until the early s, most economists saw little benefit in government intervention and strongly advocated a free trade policy.

TRUE Protection of manufacturing from foreign competition does no good unless the protection helps make the industry efficient. FALSE The strategic trade policy arguments of the new trade theorists suggest an economic justification for government intervention in international trade which challenges the rationale for unrestricted free trade found in the work of classic trade theorists such as Adam Smith and David Ricardo.

FALSE In response to the challenge to economic orthodoxy posed by new trade theory, which argues for government intervention, a number of economists—including some of those responsible for the development of the new trade theory, such as Paul Krugman—point out that although strategic trade policy looks appealing in theory, in practice it may be unworkable. FALSE Aimed at avoiding rising unemployment by protecting domestic industries and diverting consumer demand away from foreign products, the Smoot-Hawley Act erected an enormous wall of tariff barriers.

True False Greenfield investment involves the establishment of a new operation in a foreign country. True False The stock of foreign direct investment refers to the total accumulated value of foreign-owned assets at a given time. True False The flow of foreign investment refers to the number of countries a firm is investing in at any given point in time. True False FDI has grown significantly slower than world trade and world output. True False According to the United Nations, majority of changes made worldwide between and in the laws governing foreign direct investment have created a more favorable environment for FDI.

True False Developing nations such as Poland and Ukraine were the largest national recipients of inward investments within the EU in True False The inability of Africa to attract greater investment is in part a reflection of the rigid and unchanging economic policy in the region. True False Gross fixed capital formation summarizes the total amount of capital invested in factories, stores, office buildings, and the like.

True False With developed nations still accounting for the largest share of FDI inflows, FDI into developing nations has steadily decreased over the past decade. True False The data suggest the majority of cross-border investment in developing countries is in the form of mergers and acquisitions. True False Many firms believe that if they do not acquire a desirable target firm, their global rivals will.

True False When a firm exports, it need not bear the costs associated with FDI, and it can reduce the risks associated with selling abroad by using a native sales agent. True False FDI is risky because of the problems associated with doing business in a different culture where the rules of the game may be very different. True False Products with low value-to-weight ratios are the most viable for exporting. True False By limiting imports through quotas, governments reduce the attractiveness of FDI and licensing.

True False One problem of licensing is that it does not give the firm tight control over manufacturing, marketing, and strategy in a foreign country that may be required to maximize its profitability.

True False A critical competitive feature of an oligopoly is the independence of the major players. True False Under the pragmatic nationalism view, no country should ever permit foreign corporations to undertake FDI. True False Under the free market view, countries should specialize in the production of those goods and services that they can produce most efficiently.

True False The indirect employment effects of FDI are often as large as, if not larger than, the direct effects. True False Services, such as telecommunications, retailing, and many financial services, where the service has to be produced where it is delivered, lend themselves well to exporting. True False Virtually all investor countries, including the United States, have exercised some control over outward FDI from time to time. True False Employment restraints and profit requirements are the two most common ways host governments restrict FDI.

True False In , the OECD initiated talks to draft a multilateral agreement on investment that legalized discrimination against foreign investors by signatory states. True False Multiple Choice Questions A hardware manufacturing firm from the United States invests directly in an assembling plant for laptops in Taiwan.

This is an example of: A. According to the U. A firm has full outright stake in an acquisition when it acquires: A. With respect to foreign direct investment, during the past 30 years, there has been a: A.

Why has FDI grown more rapidly than world trade? Decline in trade barriers has made the fear of protectionist pressures redundant. Executives of business firms see FDI as a way of circumventing future trade barriers.

There has been a general shift toward radical and totalitarian political institutions. Privatization has made developing nations less attractive for MNEs. Or just 0. Standard delivery: to days More Shipping Options. Synopsis Includes index. Reviews On Dec 13 , a reader said:. Your Review. Terms of Sale Cold Books 30 day return guarantee, with full refund including shipping costs for up to 30 days after delivery if an item arrives misdescribed or damaged.

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