One of the most common instruments that government uses to promote trade with other nations is the establishment of a foreign trade zone. Which of the following is not an advantage of a free trade zone?Increase government revenue by applying additional import tariff.Governments of most nations have special agencies responsible for promoting exports. Which of the following is NOT a type of export promotion?Paying import dutiesExport tariff is levied mostly by the government of a country that is ________.exporting products that consist mostly of low-priced natural resourcesA(n) ________ is levied as a percentage of the stated price of an imported product.ad valorem tariffA government may impose an import quota to protect its domestic producers by placing a limit on the amount of goods allowed to enter the country. Who are the winners of imposing such quotas?Domestic producersIn 1980, the closing of U.S. carmakers' production facilities in the United States was creating a volatile anti-Japan sentiment among the population and the U.S. Congress. Fearing punitive legislation, the Japanese government and its carmakers decide to limit its automobile exports to the United States. Which of the following is this an example of?Voluntary export restraint (VER)What method of trade restriction is the U.S. using with Cuba?EmbargoWhen a certain portion of the end product must consist of domestically produced goods or that a certain portion of the final cost of a product must come from domestic sources, this is the result of _________.local content requirementsWhich of the following describes administrative delays?Regulatory controls or bureaucratic rules designed to impair the flow of imports into a countryWhich of the following has eliminated all tariffs and nontariff trade barriers on goods originating within North America?NAFTATariffs that are called specific tariffs are levied based on ________.a specific fee for each unit (measured by number, weight, etc.) of an imported productWestern European plastic producers considered retaliating against Asian competitors whose prices were substantially lower in European markets than at home. Which of the following is this an example of?DumpingThe General Agreement on Trade in Services (GATS) created during the Uruguay Round identifies four different forms that international trade in services can take. Which of the following is NOT one of those forms?Agriculture subsidyThe creation of the ________ was perhaps the greatest achievement of the 1986 Uruguay Round.World Trade OrganizationWhich of the following is an additional tariff placed on an imported product that a nation believes is receiving an unfair subsidy?Countervailing dutyThe importance of trade for a nation can be measured by...examining the volume of its trade relative to its total output.The danger of trade dependency is that...political turmoil in a country might affect all dependent countriesThe purpose of ___ is to force companies from other nations to use local resources in their production...administrative delaysFree tradeimplies that the national government exerts minimal influence on trade
proposes that national governments should directly help domestic firmsManagers should understand the effect of trade protectionism because it...may make it difficult for a company to buy what it needs from foreign supply_____ can occur when a firm sells its goods in a foreign market below what it charges in its home market....DumpingTariffs are taxes placed on goods imported into a country create a barrier to trade by increasing the cost of importTrueA foreign trade zone in primarily used by governments to....spur economic developmentExports and imports of tangible goods are included in the ________ account of a country's balance of payments.merchandiseThe balance of payments is useful to international business people for which of the following reasons?warning of new policies that could affect a country's business climateForeign direct investment is acquisition of foreign assets for the purpose of controlling them.TrueWhich stage of the international product life cycle does the innovating firm's country become a net importer of the product?standardized product stageThe requirement a sufficient portion of a product's content originate within a certain market to escape tariff chargesmarket imperfectionAccording to the market theory, competition is a common market imperfection.FalseRegional economic integration is also referred to asregionalismIndustries considered essential to national security often receive government-sponsored protection.TrueHigher levels of trade between nations result ingreater purchasing powerALADI refers to theLatin American Integration AssociationThe main purposed of the ______ is to debate and amend legislation proposed by the European Commission of the EU.European ParliamentIn this members eliminate internal barriers, adopt an external policy toward nonmembers, and eliminate barriers.common marketEconomic integration whereby countries remove all barriers to trade among themselves and restrictions for nonmembersfree trade area... encourages free trade among Canada, Mexico, and the US.NAFTAMercantilist countries used to amass wealth by acquiring less-developed territories around the world.TrueThe theory of absolute advantage measures a nation's wealth by the standard of living of its people.TrueThe theories of comparative advantage and absolute advantage assume that countries are driven only by the max productionTrue
