Nominal rates of protection
A) are always greater than effective rates of protection.
B) are always smaller than effective rates of protection.
C) refer to the tariffs placed on intermediate goods used to make the final good or service.
D) cannot be negative.
Question 2 - One obstacle to the adoption of the export promotion model by countries in other regions is that
A) the Uruguay Round of the GATT forbids many types of export promotion policies.
B) research and development for new exports is too expensive.
C) only noncommercial R&D is permitted under the rules of the GATT.
D) industrial monopolies in the high-income countries will block further exports by developing countries.
Question 3 - In order for large countries to successfully use tariffs to increase well-being,
A) they must have significant market power .
B) the deadweight loss created by the tariff must be greater than the government revenue the tariff generates.
C) domestic production must increase more significantly than for the small country case.
D) domestic consumption and imports must decrease more significantly than in the small country case.
Question 4 - One economic advantage of a large share of exports in GDP is that countries
A) can reduce their budget deficits.
B) can purchase the imports they need.
C) can maintain lower rates of unemployment.
D) develop more labor-intensive industry.
Question 5 - Efficiency losses are
A) deadweight losses caused by consumers being prevented by tariffs from buying products at the world price, products that they value more highly than that price.
B) the total loss in consumer surplus from a tariff.
C) the increase in producer surplus that is created by a tariff.
D) the deadweight loss that is created because domestic firms have to charge higher prices to produce units of output than foreign firms would have to charge.
Question 6 - Which of the following economic conditions cause export growth to be a basis for faster overall economic growth?
A) Diseconomies of scale in production for the domestic market
B) A larger-than- average service sector
C) A larger-than-average manufacturing sector
D) Economies of scale in production for the world market
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