Chapter 18 International Trade and Finance

| November 9, 2018

26)
Which of the following tariffs resulted in worldwide retaliation against the
United States during the Great Depression?
A)
the Pasta Tariff
B)
the Chicken tariff
C)
the Smoot-Hawley tariff
D)
the Tariff of Abominations

27)
In 1995, the United States threatened to impose 100% tariffs on ________ from
________ if it didn’t loosen its protectionist policies.
A)
luxury cars; Japan
B)
auto parts; Japan
C)
brandies; France
D)
light trucks; Germany

Recall
the Application about the impact tariffs have on lower income households to
answer the following question(s). Economists have found that tariffs in the
United States fall most heavily on lower-income consumers. In the United
States, tariffs are very high on textiles, apparel items and footwear, and
within these categories the highest tariffs fall on the cheapest products. In
general, to protect U.S. industries, tariffs are highest on labor-intensive
goods.

28)
Recall the application. Tariffs in the United States are very high on textiles,
apparel items and footwear. These tariffs disproportionately impact
lower-income households because
A)
lower-income households tend to purchase more of these items than do
higher-income households.
B)
these products represent a higher fraction of consumption of lower-income
households than higher-income households.
C)
the tariffs are only applicable to lower-income households.
D)
higher-income households tend to purchase products produced in the United States,
which are not subject to tariffs.

29)
Recall the application. Tariffs in the United States are very high on textiles,
apparel items and footwear, and within these categories tariffs are highest on
the cheapest products. These tariffs disproportionately impact lower-income
households because
A)
higher-income consumers tend to refuse to purchase products with tariffs.
B)
only lower-income consumers buy cheap, imported products.
C)
these cheaper products tend to be purchased by lower-income consumers.
D)
higher-income consumers can deduct the tariff from their income taxes.

30)
If the tariffs on the textiles, apparel items and footwear mentioned in the
Application were replaced by equivalent voluntary export restraints (VERs),
low-income consumers would probably
A)
be better off.
B)
be worse off.
C)
be no better nor worse off.
D)
not be subject to the VERs.

31)
If the tariffs on the textiles, apparel items and footwear mentioned in the
Application were replaced by equivalent voluntary export restraints (VERs), who
would benefit the most?
A)
low-income consumers
B)
high-income consumers
C)
the U.S. government
D)
the foreign manufacturer

32)
A voluntary export restraint occurs when one country prevents a specific
product from being imported from another country.

33)
If a country bans the importation of a particular good, the market equilibrium
is shown by the intersection of the foreign demand curve and the domestic
supply curve.

34)
An import quota is the same as an import ban.

35)
The equilibrium price under an import quota is below the price that occurs with
an import ban.

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