Which of the following is a disadvantage of the General Agreement on Tariffs and Trade's (GATT's) policies? O It abolished the Multifiber Arrangement (MFA) designed to promote free trade in textiles. O It increased the average trade tariffs among developed countries. O Non-tariff barriers that were easy to verify and challenge were removed. O Trade in services and intellectual property (IP) protection was not covered.

Which of the following is a disadvantage of the General Agreement on Tariffs and Trade's (GATT's) policies? O It abolished the Multifiber Arrangement (MFA) designed to promote free trade in textiles. O It increased the average trade tariffs among developed countries. O Non-tariff barriers that were easy to verify and challenge were removed. O Trade in services and intellectual property (IP) protection was not covered.

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter28: International Trade And Finance

Section: Chapter Questions

Problem 18SQ

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N Qf Uf V Ct A X The above figure shows the effect of an import tariff on sector Y in the home country. Which statement is INCORRECT about the effect of this tariff? The post-tariff 'trade triangle' is smaller than the free trade 'trade triangle' O Tariff caused production of X to increase and production of Y to decrease, relative to free trade production level O Tariff has caused production of X to increase and production of Y to decrease, relative to autarky production level O Tariff leads to a welfare loss relative to free trade but certainly not relative to autarky
pAutarky- pw Tariff d a b Whatt is the level of imports with and without the tariff? O With: Q³-Q2; without: Q¹-Q¹ O With: Q1-Q¹; without: Q³-Q² O With: Q-Q²; without: Q³-Q² O With: Q³-Q¹; without: Q1-Q¹ C S pw+tariff D
The two main reasons why international trade is restricted are that tariffs O A. save jobs and allow domestic producers to compete with foreign firms that use cheap labor penalize lax environmental standards and protect defense industries O B. O C. create tariff revenue and rent seeking is popular O D. protect infant industries from competition and protect national security The countries that benefit most from tariff revenue are O A. countries involved in trade organizations but are separated by large distances OB. developed countries OC. developing countries O D. countries involved in trade agreements such as NAFTA and the European Union The United States still implements some trade restrictions because the people who would lose from free trade would lose big and the people who gain, would gain a small amount. O A. True O B. False
Trade has income distribution effects. For example, suppose that because of a government-negotiated reduction in trade barriers, trade between Germany and the Czech Republic increases. Germany sells house paint to the Czech Republic. The Czech Republic sells alarm clocks to Germany. Would you expect this pattern of trade to increase or decrease jobs and wages in the paint industry in Germany? The alarm clock industry in Germany? The paint industry in Czech Republic? The alarm clock industry in Czech Republic? What has to happen for there to be no increase in total unemployment in both countries?
Assume two countries, Thailand (T) and Japan (J), have one good: cameras. The demand (d) and supply (s) for cameras In Thailand and Japan is described by the following functions: QsT=-5+14P QsJ=-10+14P QdT=60-P QdJ=80-P P is the price measured in a common currency used in both countries, such as the Thai Baht. Compute the equilibrium price (P) and quantities in each country without trade. Now assume that free trade occurs. The free-trade price goes to 56.36 Baht. Who exports and Imports cameras and in what quantities?
The potentially valid arguments for tariff protection— protection against dumping, infant industry protection, and military self-sufficiency—are also the most easily abused." a). Which of the following illustrates the potential for abuse of tariff protection? A. There is a tendency for trade barriers to remain in place even after a so-called infant industry becomes established. B. Dumping cases by foreign firms in Canada are frequent but difficult to prove. C. Military self-sufficiency eliminates subsidies for other sectors. D. Protected industries shoulder the burden of tariff protection b). Which of the following are valid arguments for tariff protection? A. Increasing domestic employment B. Ensuring adequate production levels in sectors deemed to be essential in the event of war C. Protection from foreign low-wage labour D. Increasing domestic output growth
The US decides to impose a tariff on Avocados of $0.75 each Under Free Trade you have the following information: $1 per Unit World and US Price: Domestic Consumption 25 Billion Units 1 Billion Units Domestic Production: Under a Tariff you have the following information: New US Price: $1.75 per Unit Domestic Consumption: Domestic Production: 21 Billion Units 5 Billion Units (a) How much does the government gain in tariff revenue? (b) How much do domestic producers gain? (c) How much do consumers lose? (d) What is net national or "dead weight" loss?
Consider the market for coffee in the small, isolated country of Krakozhia. Within Krakozhia, the domestic demand for coffee is: Q = 500-2p and the domestic supply of coffee is: Q* = -150+ 3p
All but one of the following statements is used to justify protectionism. Which statement is not used to justify protectionism? O Free trade leads to higher prices for imported goods. O Free trade reduces employment by driving domestic firms out of business. O A country should not rely on other countries for goods that are critical to its national defense. O Trade restrictions are necessary to protect new firms until they can gain experience and become more productive.
Please no written by hand and no emage Countries use a variety of ways to protect their trade. One way is to enact tariffs, which tax imports. This immediately raises the price of imported goods, making them less competitive when compared to locally produced goods. This works especially well for a country like the U.S., which imports a lot of consumer products and oil. The most famous example is the Smoot-Hawley Tariff of 1930. It was originally designed to protect farmers from agricultural imports from Europe, which was stepping up farming after the destruction of World War I. Go online and find out about the Smoot-Hawley Act. What role did the Smoot-Hawley Act play in the Great Depression? Into which ideological perspective would you classify the Smoot-Hawley Act? Explain your reasoning.
5. You have been asked to quantify the effects of removing a country's tariff on sugar. The ompute its value? nard part of the work is already done: Somebody has estimated how many pouncs Sugar would be produced, consumed, and imported by the country if there were no saber duty. You are given the information shown in the table. Estimated Situation without Tariff Situation with Import Tariff World price $0.10 per pound $0.10 per pound $0.02 per pound $0.12 per pound Tariff $0.10 per pound Domestic price Domestic consumption (billions of pounds per year) Domestic production (billions of pounds per year) Imports (billions of pounds per year) 22 20 8. 16 12 Calculate the following measures: a. The domestic consumers' gain from removing the tariff. b. The domestic producers' loss from removing the tariff. C. The government tariff revenue loss. d. The net effect on national well-being.
Which of the following are potentially valid arguments for tariffs or export subsi- dies, and which are not? Explain your answers. a. “Dairy producer earning in Wales are at their lowest peak despite an overallrise in farm business incomes.” b. “ThemoreecologicallycertifiedfoodsEuropeanUnionrequires,thehighertheprice of these products will be on common market.” c. “US soybean exports to China and India don’t just mean increased wealth forfarmers – they mean increased wealth for everyone in the value chain.” d. “ThePETindustrycontinuedtosustainU.S.recyclingprograms;thisshowsthe strength of the PET recycling market in the face of significant global economicslowdown and a drop in virgin feedstock prices.” e. “The price of coal has been stable, but the production dropped 10.3 percent, and workers have been forced to look for other jobs.”