Froggy Jumps Global Trade Concepts QuizVersión en línea Test your knowledge of trade policy por Alejandra 1 1. Krugman advocated that government should help establish the rules of the game that minimize the use of trade-distorting subsidies. Which entity takes on that role? a World Trade Organization b International Monetary Fund c World Bank 2 2. If Italy exports footwear to Germany below cost, this is an example of a subsidies b dumping c offsetting tariff 3 3. Indonesia unable to compete with Japan in textiles could claim the a national security argument b infant industry argument c comparative advantage 4 4. Trade sanctions against South Africa responded to a human rights violations b tariff escalation c industrial policy goals 5 5. A 16% charge on imported components is a(n) a ad valorem tariff b import quota c specific tariff 6 6. Additional $1.65 paid to soybean farmers is a a tariff b export tax c subsidy 7 7. A fixed charge of $3 per barrel of oil is a a ad valorem tariff b import quota c specific tariff 8 8. Subsidies after 2008–2009 crisis created a equal playing field b domestic efficiency c unfair competitive advantage 9 9. Limiting who can import honey and how much is a a tariff rate quota b voluntary export restraint c import quota 10 10. 10% tariff up to quota, 80% beyond is a a specific tariff b protective tariff c tariff rate quota 11 11. Extra profit from limited supply under a VER is a tariff revenue b quota rent c surplus gain 12 12. Limit requested on exports of construction machinery is a a voluntary export restraint (VER) b export tariff c import quota 13 13. Ensuring enough supply by discouraging exports uses a export tariff b import duty c domestic subsidy 14 14. “65% of value must be made locally” is a a local ownership rule b price control c local content requirement 15 15. 35% of components must be from Brazil is a a local content requirement b export ban c origin labeling 16 16. U.S. fashion firm investing in Indonesian plant is a licensing b foreign portfolio investment c foreign direct investment 17 17. U.S. firm taking 27% equity in Germany is a merger b foreign direct investment c joint venture 18 18. Amount of FDI taken during past year refers to a accumulated FDI b stock of FDI c flow of FDI 19 19. Firm avoids paying cost of foreign facilities should avoid a exporting b FDI c licensing 20 20. FDI chosen to protect secret recipe represents a market-seeking strategy b eclectic paradigm c internalization theory 21 21. Three firms controlling 80% of market is a a monopoly b monopsony c oligopoly 22 22. Four countries removing barriers among themselves is a regional economic integration b free trade area c customs union 23 23. Canada and Mexico removing barriers but independent policies is a free trade area b economic union c customs union 24 24. France and Italy removing barriers but independent nonmember policies is a free trade area b economic integration c customs union 25 25. Removing barriers and having common external tariffs is a economic union b customs union c free trade area 26 26. Free trade + common external policy + free factors = a common market b economic union c customs union 27 27. Common market moving toward common currency is a monetary union b free trade area c economic union 28 28. Central American group with Council of Ministers wants a a political union b fiscal union c customs union 29 29. High-cost domestic producers replaced by low-cost area producers is a trade deficit b trade diversion c trade creation 30 30. Lower-cost external suppliers replaced by higher-cost internal suppliers is a trade creation b trade diversion c economic integration 31 31. Country A now importing cheaper wheat from B is a trade diversion b import substitution c trade creation 32 32. Portugal buying metal from Belgium instead of cheaper England is a localized sourcing b trade diversion c trade creation 33 33. Giving everyone $10,000 causing prices to rise is a inflation b deflation c stagnation 34 34. PPP says high inflation leads to a no change b depreciation of currency c appreciation 35 35. Receiving 0.85 euro per USD refers to a exchange rate b inflation rate c interest rate 36 36. Bretton Woods allowed flexibility to a curb inflation b maximize trade c avoid high unemployment 37 37. UAE currency fixed to USD is a a dirty float b pegged exchange rate c floating rate 38 38. Currency allowed to float but government intervenes is a free float b hard peg c dirty float 39 39. Mutually agreed fixed currency values is a crawling peg b fixed exchange rate c floating rate 40 40. Gold standard adjustments lead to a trade deficit b inflationary pressure c balance-of-trade equilibrium 41 41. Bretton Woods created the IMF and the a WTO b World Bank c IMF Reserve 42 42. Xerox pursuing strategy with patents and universal need is a global outsourcing b multidomestic strategy c international strategy 43 43. Arctic Wave selling globally with no pressure to cut costs is a localization strategy b international strategy c transnational strategy 44 44. Improvement from 5 hours to 1 hour is a location economies b learning effects c economies of scale 45 45. Producing large volumes reduces unit cost: a economies of scale b liability of smallness c economies of scope 46 46. Hulu spreading fixed cost over many subscribers is a learning effects b economies of scale c economies of scope 47 47. Producing in Mexico to reduce wage costs yields a foreign direct investment b global sourcing c location economies 48 48. High-fiber premium cereal is a a cost leadership b focused strategy c differentiation strategy 49 49. Entering Europe where incumbents exist suggests a acquisition b licensing c greenfield venture 50 50. Advantage based on embedded competencies → best entry is a franchising b acquisition c greenfield venture 51 51. To avoid losing technology, avoid a wholly owned subsidiary b licensing and joint venture c exporting 52 52. Needs local knowledge + shared risk + political acceptance a joint venture b franchising c acquisition 53 53. High-tech firm wanting control over tech should use a joint venture b licensing c wholly owned subsidiary 54 54. Brand-based service firm should choose a localization b acquisition c franchising 55 55. Buying Big Tire Bikes in Brazil is a a exporting b acquisition c franchising 56 56. Shipping products directly from Illinois is a importing b exporting c licensing 57 57. Avoiding high shipping costs for bulky machines: a franchising b manufacture regionally c global outsourcing 58 58. “Plant ready for full operation” is a a purchase order b joint venture c turnkey project 59 59. Oil-rich country without refining tech uses a turnkey b franchising c licensing 60 60. Renata receiving royalty for hair dye additive is a licensing b franchising c joint venture 61 61. KFC where Jason follows strict guidelines and shares revenue is a franchising b acquisition c licensing 62 62. Determining if ovens offer greater value is evaluating a value b risk c cost 63 63. First wind-energy plant capturing large market share shows a scale economies b late-mover disadvantage c first-mover advantages 64 64. Spending money educating customers is a pioneering costs b learning effects c advertising expense 65 65. Costs spent to promote product in new markets are a setup fees b advertising costs c pioneering costs
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