1. Which of the following arguments in favor of free trade are FALSE?

A) Domestic problems are best solved with domestic solutions

B) As long as trade is not based on low wages, trade can be beneficial to all countries involved.

C) Free trade allows a more efficient use of resources than protectionism.

D) Trade policy is grossly inefficient in achieving domestic policy goals.

E) In the case of a small country, the efficiency losses associated with protectionism are often greater than any gains.

2. Most-favored nation (MFN) status in the WTO

a). is the same as national treatment

b). is in effect a prohibition against discrimination between trading partners

c). covers the contentious areas of trade in agriculture, textile and apparel

d). covers issues related to farm subsidies in industrialized countries.

e). was agreed upon during the Doha Development Round.

3. The infant industry argument

A. Is mainly associated with the tariff policies of developing nations.

B. Holds some validity as an argument if the industry experiences declining costs.

C. Sometimes lumps a nation's cultural industries in with its military/weapons industries.

D. all of the above

E. A and B only