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

fallen by half
remained constant
more than doubled
steadily decreased

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

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

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.

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

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.

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

Two examples of nontariff barriers are ____________________.

import and export taxes
quotas and import taxes
quotas and voluntary export restraints
voluntary export restraints 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 ______________________.

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

Dumping occurs when a foreign firm _____________________.

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

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

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

The argument that protection ______________________.

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

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

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

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