1) One difference between a tariff and a quota that both limit imports to the same quantity is that a

Select one:

a.quota gives more encouragement to domestic producers to become more competitive than the tariff

b.quota raises the price by less than the tariff

c.quota generates more revenue for the government than the tariff

d.tariff generates tax revenue and the quota does not

e.tariff raises the price by less than the quota

2) All of the following are arguments for trade restrictions except

Select one:

a.retaliation

b.specialization

c.cheap labor

d.diversity of industry

e.national security

3) Which of the following is not one of the policies or institutions advocated as part of the Washington Consensus?

Select one:

a.Tax reform

b.Nationalization

c.Financial liberalization

d.Trade liberalization

e.Fiscal discipline

4) The North American Free Trade Agreement (NAFTA)

Select one:

a.protects the United States from production that uses cheap labor in Mexico

b.created free trade between Canada and the United States, but protected both from Mexican cheap labor production

c.created a customs union, similar to the European Economic Community, in Canada, the United States, and Mexico

d.created a customs union, similar to the European Economic Community, in Canada and the United States

e.created a free trade area that includes Canada, the United States, and Mexico

5) With the exception of the 1920s and early 1930s, the trend in U.S. tariff rates since 1860 has been

Select one:

a.increasing

b.decreasing

c.constant

d.increasing until the 1920s and decreasing after the early 1930s

e.decreasing until the 1920s and increasing after the early 1930s

6) An unintended consequence of increasing and freer international trade

Select one:

a.is a blending of different cultures in unexpected and, perhaps to some people, undesirable ways

b.has been the abandonment by the French of such cultural icons as the Eiffel Tower

c.a move by all of Canada's NHL hockey teams to the United States

d.a decrease in standards of living for people in industrialized countries

e.an increase in unemployment in countries that trade the most with each other

7) The main difference between a free trade area and a customs union is that

Select one:

a.the former includes all countries in the western hemisphere and the latter includes only France, Germany, Italy, Holland, Belgium, and Luxembourg

b.the former requires tariffs for all members and the latter does not

c.the former does not require tariffs for all members while the latter does

d.the former allows free trade among members and individual tariff policies to be applied to non-members, while the latter allows free trade among members and a common tariff policy for non-members

e.the former uses quotas for members and tariffs for non-members, and the latter uses tariffs for members and quotas for non-members

8) Which of the following countries is the largest exporter of flowers amongst African countries?

Select one:

a.Kenya

b.Ethiopia

c.Zimbabwe

d.Egypt

9) If Chile increases its average tariff rate by 50 percent,

Select one:

a.Chilean customs duties will fall

b.Chile's terms of trade equation will increase

c.imports will be more expensive in Chile

d.employment in Chile will increase due to increased exports

e.Chilean imports will rise because import prices will fall