Question 15 What is the primary purpose of trade agreements between countries? To limit access to foreign markets. To restrict international trade and protect domestic industries. To promote economic cooperation and reduce trade barriers. To increase government revenue through tariffs. 1 pts
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Identify the trade regulation concept described in each scenario. Titles: protectionism, free trade, trade war Pairs: Country A and country B want to develop their respective export markets. Both countries have highly developed agricultural, industrial, and service sectors. The countries decide to initially lower trade barriers and eventually remove them completely. Scenario 1: Country A has an agrarian economy with an emerging industrial sector. To allow domestic industries to grow, country A applies quotas on all industrial products except those that are used as resources. Scenario 2: Country A passes an economic policy that will indirectly give its own companies an advantage over country B’s companies. Country B alleges that the policy violates the countries’ trade agreement and imposes retaliatory tariffs.
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7. By the mid-1930's, governments all over the world entered the ____ era of international trade. Since 2017, the U.S. and other countries have moved closer to the ____ era which, in 1930, saw the passage of ____ and ____. a. Reciprocity; restriction; The Smoot-Hawley Tariff Act; The Great Depression b. Restriction; reciprocity; NAFTA; job losses in the United States. c. Revenue; restriction; Article One, Section Eight, Clause three of the Constitution; as expected, a decrease in total revenue. d. Reciprocity; restriction; the 16th amendment; World War II e. None of the above. 8. Based on what we know about the economic impact of tariffs and quotas, which of the garners some conditional support from economists? a. When concerns over human rights and the environment are used to increase tariffs. b. When a country becomes convinced that its trading partners are engaging in dumping or currency manipulation. c. When the value of the dollar fluctuates compared to foreign currency. d. When a government has decided that it needs to eliminate a balance of trade deficit with another nation. e. When, with temporary protection, an infant industry could emerge and show long-run comparative advantages over other countries. 9. Historically, many people have argued that tariffs and quotas should be used to prevent other nations from engaging in predatory pricing. For economists, this argument is largely flawed ______ because: a. Predatory pricing leads to fewer companies over time; higher prices and monopoly profits for the successful predator. b. Predatory pricing may lead to large discounts for consumers in the short run, but the elimination of job opportunities in the long run as domestic suppliers close. c. Predatory pricing has been proven to be an inefficient practice since the "predators" must be willing to incur initial losses and do not have the power to control markets indefinitely. d. Predatory pricing leads to companies with no comparative advantage being dominant in the markets they pursue.
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7. The arguments for restricting trade Suppose there is a policy debate over whether Canada should impose trade restrictions on imported semiconductors: A senator from a province with several semiconductor factories explains that it is necessary to impose trade restrictions, such as a tariff, on the semiconductor industry to protect workers in the domestic semiconductor industry. The senator claims that without trade protection, there will be layoffs, causing many Canadian workers in the semiconductor industry to be unemployed. Which of the following justifications is the senator using to argue for the trade restriction on semiconductors? Saving-domestic-jobs argument Unfair competition argument National security argument Infant industry argument Using-protection-as-a-bargaining-chip argument
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