International Business and Money Summary (all-inclusive) Questions and Answers

Specific Tariff - -A tariff levied as a fixed charge for each unit of a good -Voluntary Export Restraint - -A quota trade imposed from the exporting country's side -Infant Industry - -An industry should be protected until it can develop and be viable and competitive internationally. Proposed by Alexander Hamilton and is the oldest argument for government intervention. -Ad Valorem Tariff - -Levied tariff as a proportion of the value of the imported goods -Subsidy - -A government payment to a domestic producer, which helps domestic producers compete against low-cost foreign imports and gain export markets. They take many forms including cash grants, low-interest loans, tax breaks, and government equity participation in domestic firms. Domestic Producers gain the most. Can help a firm achieve first-mover advantage. -Import Quotas - -A direct restriction on the quantity of some good that may be imported into a country. They reduce overall efficiency -Tariff Rate Quota - -A hybrid of a quota and a tariff where a lower tariff is applied to imports within the quota to those over the quota