University of Colorado, Boulder

INBU 3300

Chapter 6

1)Trade protectionism will most likely affect which aspect of a company's operations?

1. 1. 1. selecting employees
      2. investing short-­?term capital
      3. acquiring foreign supplies
      4. relocating personnel overseas

1. 2. Managers should understand the effect of trade protectionism because                                .
      1. trade protectionism may limit the number of people permitted to practice a specific profession
      2. trade protectionism requires the payment of high insurance rates to transport goods internationally
      3. trade protectionism may prevent companies' enactment of merger and acquisition agreements
      4. trade protectionism may make it difficult for a company to buy what it needs from foreign suppliers

1. 3. Assume a government is considering import restrictions on sugar because sugar imports are hurting the domestic industry. Which of the following groups is LEAST likely to speak out on the subject?
      1. politicians in areas that grow sugar
      2. employees of sugar companies
      3. sugar company owners
      4. sugar consumers

1. 4. The rationale for the infant-­?industry argument for trade protection is that                                    .
      1. incubator centers in which business, government, and academia cooperate will develop entrepreneurial companies
      2. a country should give one firm in an industry a monopoly status so that it will grow large enough to be competitive internationally
      3. it takes time for an industry to become competitive in world markets, so protection is needed to help this industry pass through the critical period
      4. lower restrictions should be placed on products coming from countries where a government has a large sphere of political influence

1. 5. It is sometimes contended that by imposing import controls a country might be

able to increase its exports. This contention is premised on                                .

1. 1. 1. the country's simultaneous currency depreciation, which decreases the price of its exports
      2. using the import taxes to institute efficiency measures in potential export industries
      3. raising domestic prices in one industry so that the excess domestic profits in that industry can compensate for the cost of dumping products from another industry into foreign markets
      4. getting other countries to maintain or relax their current import restrictions instead of escalating restrictions in a trade war

1. 6. Exporting below cost or below the home country price is called                                  .
      1. countertrade
      2. an export-­?led development policy
      3. a strategic trade policy
      4. dumping

1. 7. The most common type of tariff is the                         tariff.
      1. export
      2. import
      3. transit
      4. ad valorem

1. 8. In international trade, what is a quota?
      1. a guarantee by one country to buy some minimum amount from another
      2. a quantitative limit on the amount of a product that can be imported or exported
      3. a countertrade arrangement that establishes the value of imports and exports
      4. a bilateral agreement calling for mutual access to markets
   9. A physician, who is a citizen of and licensed in Country A, meets the professional licensing requirements of Country B. The physician will most likely                                                                                         .
      1. have to pass a language proficiency exam before being allowed to work in Country B
      2. not be allowed to work in the not-­?for-­?profit sector in Country A or Country B for a set period
      3. have to get a work permit from Country B's immigration authorities to work in Country B
      4. have to work in the not-­?for-­?profit sector in Country B for a period of time before being permitted to work for a profit-­?seeking organization