国际经济学作业答案-第九章

Chapter 9

The Political Economy of Trade Theory

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Multiple Choice Questions

1.

The efficiency case made for free trade is that as trade distortions such as tariffs are dismantled and

removed,

(a)

government tariff revenue will decrease, and therefore national economic welfare will decrease.

(b)

government tariff revenue will decrease, and therefore national economic welfare will increase.

(c)

deadweight losses for producers and consumers will decrease, hence increasing national

economic welfare.

(d)

deadweight losses for producers and consumers will decrease, hence decreasing national

economic welfare.

(e)

None of the above.

Answer: C

2.

The opportunity to exploit economies of scale is one of the gains to be made from removing tariffs

and other trade distortions. These gains will be found by a decrease in

(a)

world prices of imports.

(b)

the consumption distortion loss triangle.

(c)

the production distortion loss triangle.

(d)

Both (b) and (c).

(e)

None of the above.

Answer: E

3.

It is argued that special interest groups are likely to take over and promote protectionist policies,

which may lead to an increase in national economic welfare. This argument leads to

(a)

a presumption that in practice a free trade policy is likely to be better than alternatives.

(b)

a presumption that trade policy should be shifted to Non-Governmental Organizations, so as to

limit taxpayer burden.

(c)

a presumption that free trade is generally a second-best policy, to be avoided if feasible

alternatives are available.

(d)

a presumption that free trade is the likely equilibrium solution if the government allows special

interest groups to dictate its trade policy.

(e)

None of the above.

Answer: A

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4.

The

optimum tariff is

(a)

the best tariff a country can obtain via a WTO negotiated round of compromises.

(b)

the tariff, which maximizes the terms of trade gains.

(c)

the tariff, which maximizes the difference between terms of trade gains and terms of trade loses.

(d)

not practical for a small country due to the likelihood of retaliation.

(e)

not practical for a large country due to the likelihood of retaliation.

Answer: E

The

optimum tariff

is most likely to apply to

(a)

a small tariff imposed by a small country.

(b)

a small tariff imposed by a large country.

(c)

a large tariff imposed by a small country.

(d)

a large tariff imposed by a large country.

(e)

None of the above.

Answer: B

The

prohibitive tariff

is a tariff that

(a)

is so high that it eliminates imports.

(b)

is so high that it causes undue harm to trade-partner economies.

(c)

is so high that it causes undue harm to import competing sectors.

(d)

is so low that the government prohibits its use since it would lose an important revenue source.

(e)

None of the above.

Answer: A

The existence of marginal social benefits which are not marginal benefits for the industry producing

the import substitutes

(a)

is an argument supporting free trade and non-governmental involvement.

(b)

is an argument supporting the use of an optimum tariff.

(c)

is an argument supporting the use of market failures as a trade-policy strategy.

(d)

is an argument rejecting free trade and supporting governmental involvement.

(e)

None of the above.

Answer: D

The domestic market failure argument is a particular case of the theory of

(a)

the optimum, or first-best.

(b)

the second best.

(c)

the third best.

(d)

the

sufficing principle

.

(e)

None of the above.

Answer: B

5.

6.

7.

8.

Chapter 9

The Political Economy of Trade Theory

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9.

The difficulty of ascertaining the right

second-best

trade policy to follow

(a)

reinforces support for the

third-best

policy approach.

(b)

reinforces support for increasing research capabilities of government agencies.

(c)

reinforces support for abandoning trade policy as an option.

(d)

reinforces support for free-trade options.

(e)

None of the above.

Answer: D

10.

The authors of the text believe that

(a)

second-best policy is worse than optimal policy.

(b)

special interest groups generally enhance national welfare.

(c)

national welfare is likely to be enhanced by the imposition of an optimal tariff.

(d)

market Failure arguments tend to support free-trade policy.

(e)

there is no such thing as national welfare.

Answer: E

11.

The simple model of competition among political parties long used by political scientists tends to

lead to the practical solution of selecting the

(a)

optimal tariff.

(b)

prohibitive tariff.

(c)

zero (free-trade) tariff.

(d)

the tariff rate favored by the median voter.

(e)

None of the above.

Answer: D

12.

The median voter model

(a)

works well in the area of trade policy.

(b)

is not intuitively reasonable.

(c)

tends to result in biased tariff rates.

(d)

does not work well in the area of trade policy.

(e)

None of the above.

Answer: D

13.

The fact that trade policy often imposes harm on large numbers of people, and benefits only a few

may be explained by

(a)

the lack of political involvement of the public.

(b)

the power of advertisement.

(c)

the problem of collective action.

(d)

the basic impossibility of the democratic system to reach a fair solution.

(e)

None of the above.

Answer: C

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14.

Protectionism tends to be concentrated in two sectors:

(a)

agriculture and clothing.

(b)

high tech and national security sensitive industries.

(c)

capital and skill intensive industries.

(d)

industries concentrated in the South and in the Midwest of the country.

(e)

None of the above.

Answer: A

15.

Judging by the changes in the height of tariff rates in major trading countries, the world has been

experiencing a great

(a)

trade liberalization.

(b)

surge of protectionism.

(c)

lack of progress in the trade-policy area.

(d)

move towards regional integration.

(e)

None of the above.

Answer: A

16.

The World Trade Organization (WTO) was organized as a successor to the

(a)

IMF.

(b)

UN.

(c)

UNCTAD.

(d)

GATT.

(e)

The World Bank.

Answer: D

17.

The WTO was established by the ____________of multilateral trade negotiations.

(a)

Kennedy Round

(b)

Tokyo Round

(c)

Uruguay Round

(d)

Dillon Round

(e)

None of the above.

Answer: C

18.

The Smoot-Hawley Tariff Act of 1930 has generally been associated with

(a)

falling tariffs.

(b)

free trade.

(c)

intensifying the worldwide depression.

(d)

recovery from the worldwide depression.

(e)

Non-tariff barriers.

Answer: C

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19.

A trade policy designed to alleviate some domestic economic problem by exporting it to foreign

countries is know as a(n)

(a)

international dumping policy.

(b)

countervailing tariff policy.

(c)

beggar thy neighbor policy.

(d)

trade adjustment assistance policy.

(e)

None of the above.

Answer: C

20.

The General Agreement on Tariffs and Trade and the World Trade Organization have resulted in

(a)

termination of export subsidies applied to manufactured goods.

(b)

termination of import tariffs applied to manufactures.

(c)

termination of import tariffs applied to agricultural commodities.

(d)

termination of international theft of copyrights.

(e)

None of the above.

Answer: E

21.

The General Agreement on Tariffs and Trade and the World Trade Organization have resulted in

(a)

the establishment of universal trade adjustment assistance policies.

(b)

the establishment of the European Union.

(c)

the reciprocal trade clause.

(d)

reductions in trade barriers via multilateral negotiations.

(e)

None of the above.

Answer: D

22.

Trade theory suggests that Japan would gain from a subsidy the United States provides its grain

farmers if the gains to Japanese consumers of wheat products more than offsets the losses to

Japanese wheat farmers. This would occur as long as Japan

(a)

is a net importer in bilateral trade flows with the United States.

(b)

is a net importer of wheat.

(c)

has a comparative advantage in wheat.

(d)

has an absolute advantage in producing wheat.

(e)

None of the above.

Answer: B

23.

Countervailing duties are intended to neutralize any unfair advantage that foreign exporters might

gain because of foreign

(a)

tariffs.

(b)

subsidies.

(c)

quotas.

(d)

Local-Content legislation.

(e)

None of the above.

Answer: B

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24.

Throughout the post- World War II era, the importance of tariffs as a trade barrier has

(a)

increased.

(b)

decreased.

(c)

remained the same.

(d)

fluctuated wildly.

(e)

demonstrated a classic random walk with a mean-reversion tendency.

Answer: B

25.

In 1980 the United States announced an embargo on grain exports to the Soviet Union in response to

the Soviet invasion of Afghanistan. This embargo was mainly resisted by

(a)

U.S. grain consumers of bread.

(b)

U.S. grain producers.

(c)

foreign grain producers.

(d)

U.S. communists.

(e)

None of the above.

Answer: B

26.

Export embargoes cause greater losses to consumer surplus in the target country

(a)

the lesser its initial dependence on foreign produced goods.

(b)

the more elastic

is the target country’s demand schedule.

(c)

the more elastic is the target country’s domestic supply.

(d)

the more inelastic the target country’s supply.

(e)

None of the above.

Answer: D

27.

The strongest political pressure for a trade policy that results in higher protectionism comes from

(a)

domestic workers lobbying for import restrictions.

(b)

domestic workers lobbying for export restrictions.

(c)

domestic workers lobbying for free trade.

(d)

domestic consumers lobbying for export restrictions.

(e)

domestic consumers lobbying for import restrictions.

Answer: A

28.

The average tariff rate to data on dutiable imports in the United States is approximately

(a)

5 % of the value of imports.

(b)

15% of the value of imports.

(c)

20 % of the value of imports.

(d)

25% of the value of imports.

(e)

more than 25% of the value of imports.

Answer: A