Econ 3100 Exam 2 Questions with Complete Solutions

After WWII, the Allied countries met to discuss issues such as... Correct Answer-high trade barriers and unstable exchange rates In 1947 the General Agreement on Tariffs and Trade (GATT) was established to... Correct Answer-reduce barriers to trade between nations Some of the GATT's main provisions Correct Answer-1. A nation must extend the same tariffs to all trading partners that are GATT members 2. Tariffs may be imposed in response to unfair trade practices such as dumping 3. Countries should not limit the quantity of goods and services that they import 4. Countries should declare export subsidies provided to particular firms, sectors, or industries. Article XVI deals with export subsidies, and states that countries should notify each other of the extent of subsidies and discuss the possibility of eliminating them. 5. Countries can temporarily raise tariffs for certain products. 6. Regional trade agreements are permitted under Article XXIV of the GATT. The GATT recognizes the ability of blocs of countries to form two types of regional trade agreements: Free trade areas and customs unions dumping Correct Answer-the sale of export goods at a price less than that charged at the export market, or at a price less than costs of production and shipping