True / False Questions
1. Subsidies are a trade policy instrument.
True False
2. Tariffs are the most complex instrument of trade policy.
True
... [Show More] False
3. Tariffs are the instrument that the GATT and WTO have been most successful in
limiting.
True False
4. In recent decades, a fall in subsidies, quotas, and voluntary export restraints has
been accompanied by a corresponding fall in nontariff barriers.
True False
5. Nontariff barriers include subsidies, quotas, voluntary export restraints, and
antidumping duties.
True False
6. Specific tariffs are levied as a proportion of the value of the imported good.
True False
7. Ad valorem tariffs reduce the cost of imported products relative to domestic
products.
True False
8. Tariffs are largely pro-producer and anti-consumer.
True False
9. Tariffs increase the overall efficiency of the world economy because a protective
tariff encourages domestic firms to produce products more efficiently at home that,
in theory, could be produced abroad.
True False
10. Export tariffs are far less common than import tariffs.
True False
11. The main gains from subsidies accrue to importers, whose international
competitiveness is increased as a result of these subsidies.
True False
12. Japan has a long history of supporting inefficient domestic producers with farm
subsidies.
True False
13. A direct restriction on the quantity of some good that may be imported into a
country is a quota rent.
True False
14. Quotas benefit consumers the most.
True False
15. The Buy America Act specifies that government agencies must give preference to
American products when putting contracts for equipment out for bid unless the
foreign products have a significant advantage.
True False
16. Administrative trade policies are bureaucratic rules that are designed to make it
easy for imports to enter a country.
True False
17. Dumping 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.
True False
18. Antidumping policies are designed to punish foreign firms that engage in dumping
industrial waste into the environment.
True False
19. The fair market value of a good is normally judged to be lesser than the costs of
producing that good.
True False
20. Countries sometimes argue that it is necessary to protect certain industries
because they are important for national security. [Show Less]