BUSMHR 2000-Final exam Questions and Answers with complete solution
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Course
BUSMHR 2000
Institution
BUSMHR 2000
voluntary export restraints - ️️a.An official agreement with another country that
voluntarily restricts the quantity of its exports
b.Quota on trade imposed by the exporting country, typically at the request of the
importing country's government
Ad Valorem Tariff - ️️can increase govern...
BUSMHR 2000-Final exam
voluntary export restraints - ✔️✔️a.An official agreement with another country that
voluntarily restricts the quantity of its exports
b.Quota on trade imposed by the exporting country, typically at the request of the
importing country's government
Ad Valorem Tariff - ✔️✔️can increase government revenues, provide protection to
domestic producers against foreign competitors by increasing the cost of imported
foreign goods, force consumers to pay more for certain imports, reduce overall
efficiency of the world economy
free trade - ✔️✔️government does not attempt to restrict what citizens can buy from
another country or what they can sell to another country
tariffs - ✔️✔️A tax on imports that effectively raises the cost of imported products
relative to domestic products
special tariffs - ✔️✔️levied as a fixed charge for each unit of a good imported
subsidies - ✔️✔️government payments to domestic producers
can help producers:
- compete against low-cost foreign imports
-gain export markets
import quotas - ✔️✔️A direct restriction on the quantity of good that may be imported
into a country
tariff rate quota - ✔️✔️a hybrid of a quota and a tariff where a lower tariff is applied to
imports within the quota than to those over the quota
voluntary export expansion - ✔️✔️an official agreement with another country in which it
agrees to import more from the U.S.
local content requirements - ✔️✔️a. A local content requirement demands that some
specific fraction of a good be produced domestically
b. Can be in physical terms or in value terms
c. Local content requirements benefit domestic producers and jobs, but consumers face
higher prices
, administrative policies - ✔️✔️a. bureaucratic rules designed to make it difficult for
imports to enter a country
b. these policies hurt consumers by denying access to possibly superior foreign
products
Arguments against free trade - ✔️✔️1. infant industry
2. national defense
3. dumping
4. environmental concerns
infant industry theory - ✔️✔️-The supposition that emerging domestic industries need
protection against international competition until they become mature and stable
-In economics, an infant industry is one that is new and in its early stages of
development, and not yet capable of competing against established industry
competitors
beggar-thy-neighbor policies - ✔️✔️Policies country enacts to address economic woes
that actually worsens the economic problems of other countries
protecting intellectual property - ✔️✔️members believe that the protection of intellectual
property rights is essential to the international trading system
Smoot-Hawley Act - ✔️✔️created significant import tariffs on foreign goods
GATT (General Agreement on Tariffs and Trade) - ✔️✔️an international trade treaty
designed to encourage worldwide trade among its members
WTO (World Trade Organization) - ✔️✔️the only international body dealing with the
rules of trade between nations
FDI (Foreign Direct Investment) - ✔️✔️a. An investment made by a firm or individual in
one country into business interests located in another country
b. Generally, FDI takes place when an investor establishes foreign business operations
or acquires foreign business assets
FDI vs. portfolio investment - ✔️✔️-FDI is distinguished from portfolio investment in
which an investor merely purchases equities of foreign-based companies
-Distinguished from portfolio investment by a notion of direct control
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