#1
Which trade policy aims to protect domestic industries by imposing restrictions on the import of certain goods?
Protectionist Policy
ExplanationPolicy aiming to shield domestic industries via import restrictions.
#2
In the context of international trade, what is a trade deficit?
When a country imports more than it exports
ExplanationOccurs when imports exceed exports in a nation.
#3
What is the purpose of a countervailing duty in international trade?
To offset subsidies provided by foreign governments
ExplanationImplemented to counteract foreign government subsidies.
#4
What is the term used to describe a situation where two countries agree to reduce or eliminate trade barriers between them?
Bilateral trade agreement
ExplanationPact between two nations to cut trade barriers.
#5
What is the primary purpose of a trade barrier?
To restrict or limit international trade
ExplanationIntended to curb or confine global trade.
#6
What is the purpose of imposing tariffs in international trade?
To restrict imports and protect domestic industries
ExplanationImposed to limit imports, safeguarding domestic sectors.
#7
Which international organization is responsible for facilitating global trade negotiations and agreements?
World Trade Organization (WTO)
ExplanationGlobal body overseeing trade pacts and discussions.
#8
Which agreement eliminated many tariffs and trade barriers among the United States, Canada, and Mexico?
NAFTA (North American Free Trade Agreement)
ExplanationPact removing tariffs between US, Canada, and Mexico.
#9
What is the Smoot-Hawley Tariff, enacted in 1930, known for in the history of international trade?
Exacerbating the Great Depression by raising tariffs
ExplanationInfamous for worsening the Great Depression with increased tariffs.
#10
Which economic concept is often associated with the idea that a country should specialize in the production of goods in which it has a comparative advantage?
Comparative advantage
ExplanationNations focusing on goods they produce most efficiently.
#11
What is a non-tariff barrier in international trade?
A barrier other than tariffs that restricts trade
ExplanationRestriction on trade not involving tariffs.
#12
What is a subsidy in the context of international trade?
Financial assistance provided by the government to domestic producers
ExplanationGovernment aid to local producers for global competitiveness.
#13
Which market intervention aims to stabilize prices and ensure a fair income for producers by buying or selling goods on the market?
Buffer stock scheme
ExplanationIntervention maintaining price stability and fair profits.
#14
What does the term 'dumping' refer to in the context of international trade?
Exporting goods below their production cost to gain market share
ExplanationExporting below cost to seize market share.
#15
Which trade policy emphasizes reducing or eliminating trade barriers and promoting open markets?
Free Trade Policy
ExplanationPolicy advocating minimal trade restrictions.
#16
Which international trade theory suggests that countries should specialize in the production of goods that they can produce most efficiently?
Comparative advantage theory
ExplanationProposes specialization in most efficiently produced goods.
#17
What is the purpose of the General Agreement on Tariffs and Trade (GATT)?
To facilitate global trade negotiations and reduce trade barriers
ExplanationAims to ease trade negotiations and lessen barriers.