ECN 607 Chapter Notes - Chapter 7: Commercial Policy, Pearson Education, Association To Advance Collegiate Schools Of Business
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Copyright © 2018 Pearson Education, Inc.
International Economics, 7e (Gerber)
Chapter 7 Commercial Policy
7.1 Introduction: Commercial Policy, Tariffs, and Arguments for Protection
1) Sixty years after the signing of GATT and following eight completed round of trade
negotiations,
A) trade barriers are no longer an issue.
B) trade barriers have been successfully reduced.
C) trade barrier have actually increased.
D) there has been no real change in trade barrier.
Answer: B
Topic: Introduction: Commercial Policy, Tariffs, and Arguments for Protection
Difficulty: Easy
Objective: LO 7.1 Describe the differences in tariffs across economic sectors and over time.
AACSB: Application of knowledge
2) Which of the following is NOT a true statement?
A) Trade barriers are usually a good way of protecting jobs.
B) There have been significant reductions in trade barriers over the last 60 years.
C) Economists generally favor further reductions in trade barriers.
D) There are diminishing returns to trade negotiations.
Answer: A
Topic: Introduction: Commercial Policy, Tariffs, and Arguments for Protection
Difficulty: Easy
Objective: LO 7.1 Describe the differences in tariffs across economic sectors and over time.
AACSB: Application of knowledge
3) The system of trade rounds under GATT and the WTO has been successful at creating trade
rules and reducing trade barriers.
Answer: TRUE
Topic: Introduction: Commercial Policy, Tariffs, and Arguments for Protection
Difficulty: Easy
Objective: LO 7.1 Describe the differences in tariffs across economic sectors and over time.
AACSB: Application of knowledge
4) Since there are diminishing returns to the removal of further trade barriers, economists do not
favor further negotiations.
Answer: FALSE
Topic: Introduction: Commercial Policy, Tariffs, and Arguments for Protection
Difficulty: Easy
Objective: LO 7.1 Describe the differences in tariffs across economic sectors and over time.
AACSB: Application of knowledge
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Copyright © 2018 Pearson Education, Inc.
7.2 Tariff Rates in the World's Major Traders
1) The pattern of protection in industrial countries is particularly harmful to the interests of
A) low-income developing countries.
B) high-income industrial countries.
C) Asian nations.
D) European nations.
Answer: A
Topic: Tariff Rates in the World's Major Traders
Difficulty: Easy
Objective: LO 7.1 Describe the differences in tariffs across economic sectors and over time.
AACSB: Application of knowledge
2) High-income industrial nations such as the United States and Japan tend to have their highest
tariffs in
A) newer, high-technology manufacturing industries.
B) capital-intensive, diversified manufacturing.
C) agriculture, clothing, and textiles
D) automobiles.
Answer: C
Topic: Tariff Rates in the World's Major Traders
Difficulty: Easy
Objective: LO 7.1 Describe the differences in tariffs across economic sectors and over time.
AACSB: Application of knowledge
3) At the end of World War II,
A) tariffs around the world fell substantially.
B) agricultural subsidies were significantly reduced.
C) most nations began to apply tariffs uniformly across all industries.
D) tariffs increased in low-income countries and fell a small percentage in high-income
countries.
Answer: A
Topic: Tariff Rates in the World's Major Traders
Difficulty: Easy
Objective: LO 7.1 Describe the differences in tariffs across economic sectors and over time.
AACSB: Application of knowledge
4) Tariffs are highest in which sector internationally?
A) Agriculture
B) Energy
C) Technology
D) Automobiles
Answer: A
Topic: Tariff Rates in the World's Major Traders
Difficulty: Easy
Objective: LO 7.1 Describe the differences in tariffs across economic sectors and over time.
AACSB: Application of knowledge
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Copyright © 2018 Pearson Education, Inc.
5) Developed countries have lost comparative advantage in
A) high-tech industries.
B) labor-intensive industries.
C) capital-intensive industries.
D) agricultural industries.
Answer: B
Topic: Tariff Rates in the World's Major Traders
Difficulty: Easy
Objective: LO 7.1 Describe the differences in tariffs across economic sectors and over time.
AACSB: Application of knowledge
6) At this point, potential gains from further tariff reductions worldwide are
A) still very large.
B) equal to zero.
C) relatively small.
D) not worth the cost of negotiations.
Answer: C
Topic: Tariff Rates in the World's Major Traders
Difficulty: Moderate
Objective: LO 7.1 Describe the differences in tariffs across economic sectors and over time.
AACSB: Application of knowledge
7) Countries like Argentina and Australia protect agriculture less heavily than other agricultural
producers because
A) they have a large comparative advantage in production.
B) it is illegal under WTO rules.
C) they do not have significant agricultural sectors.
D) they are trying to help other countries.
Answer: A
Topic: Tariff Rates in the World's Major Traders
Difficulty: Easy
Objective: LO 7.1 Describe the differences in tariffs across economic sectors and over time.
AACSB: Application of knowledge
8) The average agricultural tariff in the U.S. is about
A) 3 percent.
B) 5 percent.
C) 9 percent.
D) 15 percent.
Answer: B
Topic: Tariff Rates in the World's Major Traders
Difficulty: Easy
Objective: LO 7.1 Describe the differences in tariffs across economic sectors and over time.
AACSB: Application of knowledge
find more resources at oneclass.com
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Document Summary
Aacsb: application of knowledge: the system of trade rounds under gatt and the wto has been successful at creating trade rules and reducing trade barriers. Aacsb: application of knowledge: since there are diminishing returns to the removal of further trade barriers, economists do not favor further negotiations. Topic: introduction: commercial policy, tariffs, and arguments for protection. 7. 2 tariff rates in the world"s major traders: the pattern of protection in industrial countries is particularly harmful to the interests of, low-income developing countries, high-income industrial countries, asian nations, european nations. Aacsb: application of knowledge: high-income industrial nations such as the united states and japan tend to have their highest tariffs in, newer, high-technology manufacturing industries, capital-intensive, diversified manufacturing, agriculture, clothing, and textiles, automobiles. Aacsb: application of knowledge: tariffs are highest in which sector internationally, agriculture, energy, technology, automobiles. 2: developed countries have lost comparative advantage in, high-tech industries, labor-intensive industries, capital-intensive industries, agricultural industries.
