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BUSHMR 2000 Exam 2 Questions and Answers | 100% Pass In order to encourage the agricultural industry, the French government provided low- interest loans for the purchase of seeds and fertilizers. The government also gave cash grants and made tax reductions. Which instrument of trade policy is b...

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EMILLYCHARLOTTE 2024/2025 ACADEMIC YAER
©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED
FIRST PUBLISH SEPTEMBER 2024

BUSHMR 2000 Exam 2 Questions and
Answers | 100% Pass

In order to encourage the agricultural industry, the French government provided low-

interest loans for the purchase of seeds and fertilizers. The government also gave cash

grants and made tax reductions. Which instrument of trade policy is being used by the

French government?




tariffs

voluntary export restraints

subsidies

local content requirements

import quotas - Answer✔✔-subsidies

A(n) ________ refers to the extra profit that producers make when supply is artificially

limited by an import quota.



profit margin

net profit

import profit

trade surplus

quota rent - Answer✔✔-quota rent


1/34

,EMILLYCHARLOTTE 2024/2025 ACADEMIC YAER
©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED
FIRST PUBLISH SEPTEMBER 2024
Italy has a direct restriction on the amount of metal products that may be imported into

the country. Which instrument of trade policy does this reflect?



voluntary import restraint

tariff rate quota

export ban

import quota

quota rent - Answer✔✔-import quota

How did the Smoot-Hawley Act affect employment?



It created more jobs domestically and abroad.

It decreased the overall wage rate.

It boosted job rates around the world.

It did not have any effect on employment.

It had a damaging effect on employment abroad. - Answer✔✔-It had a damaging

effect on employment abroad.

________ is variously defined as selling goods in a foreign market at below their costs

of production or as selling goods in a foreign market at below their "fair" market value.



Circular trade

Subsidy

Barter


2/34

,EMILLYCHARLOTTE 2024/2025 ACADEMIC YAER
©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED
FIRST PUBLISH SEPTEMBER 2024
Countertrade

Dumping - Answer✔✔-Dumping

A tax of 32 cents is levied for each pair of eyeglasses imported into a nation. This is an

example of a(n)



quota rent.

specific tariff.

ad valorem tariff.

import quota.

local content requirement. - Answer✔✔-specific tariff.

High tariff barriers and subsidies in the agricultural industry ultimately lead to



the lack of overproduction of products.

an increased volume of agricultural trade.

increased prices for consumers.

stronger competition from foreign suppliers.

lower overall prices for the end-user. - Answer✔✔-increased prices for consumers.

A tariff rate quota provides a lower tariff rate to



all imports in a specific industry.

imports within the quota.

only domestic producers.

3/34

, EMILLYCHARLOTTE 2024/2025 ACADEMIC YAER
©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED
FIRST PUBLISH SEPTEMBER 2024
agricultural products.

imports that are over the quota. - Answer✔✔-imports within the quota.

A foreign government was not enforcing its intellectual property rights, which resulted in

massive copyright infringements. In turn, this was costing U.S. companies millions of

dollars in lost sales revenues. To force the country to play by the rules, the United

States threatened to impose trade sanctions on a range of imports from the country's

businesses. The underlying motive for intervention by the U.S government was



to protect national security.

to further support foreign policy objectives.

retaliation.

to increase the trade surplus of the United States.

to protect human rights. - Answer✔✔-retaliation

An implication of trade barriers for business practice is that they



reduce the cost of importing products to a country.

put a foreign firm at a competitive advantage to indigenous competitors in that country.

allow for efficient allocation of production functions.

limit a firm's ability to serve a country from locations outside of that country.

encourage governments to engage in foreign direct investment. - Answer✔✔-limit a

firm's ability to serve a country from locations outside of that country.




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