Since 1960, the volume of U.S. international trade as a percentage of total output has ___________________.

more than doubled
fallen by half
steadily decreased
remained constant

The GATT has had several rounds of negotiations, the last one being the Uruguay Round which created the __________________.

World Trade Organization
highest tariffs since World War II
Smoot-Hawley tariff
North American Free Trade Agreement

The country of Alpha can produce 2 packets of cookies at a cost of 4 boxes of chocolates. Beta can produce 2 boxes of chocolates at a cost of 2 packets of cookies.

Alpha has a comparative advantage in producing chocolates.
Beta has a comparative advantage in both chocolates and cookies.
Alpha has a comparative advantage in producing cookies.
Beta has a comparative advantage in producing chocolates.

The country of Alpha can produce 2 packets of cookies at a cost of 4 boxes of chocolates. Beta can produce 2 boxes of chocolates at a cost of 2 packets of cookies.

Both countries will benefit from trade.
Neither country will benefit from trade.
Only Beta will benefit from trade.
Only Alpha will benefit from trade.

Two examples of nontariff barriers are ____________________.

quotas and voluntary export restraints
import and export taxes
voluntary export restraints and import taxes
quotas and import taxes

The proposition that protection is necessary to allow an infant industry to grow into a mature industry so that it can compete in world markets is the ______________________.

infant-industry argument
new industry proposition
growth proposition
infant-maturity argument

Dumping occurs when a foreign firm _____________________.

sells its output below its cost of production
pollutes international waters
disposes of waste material internationally
sells inferior output to foreigners

A tariff _______ the quantity of the good imported and _______ the domestic price of the imported good.

decreases; increases
decreases; decreases
increases; greatly increases
does not change; increases

The argument that protection ______________________.

saves jobs is flawed
penalizes poor environmental standards is true
allows us to compete with cheap foreign wages is true
is necessary for infant industries is true

Under NAFTA, most barriers to international trade between the United States, Canada, and Mexico ____________.

will be eliminated by 2009
will be eliminated as soon as Canada stops trading with Cuba
depend on the exchange rates between the U.S. dollar, the Canadian dollar, and the Mexican peso
were eliminated on January 1, 1994

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