BUSMHR 2000 Final Exam Review Questions And Answers Graded A+

benefit domestic producers by limiting competition from abroad, increases prices for consumers - ️️results of VER local content requirement - ️️demands that some fraction of the product be produced domestically help domestic producers compete against low cost foreign imports and gain export markets, consumers absorb the costs - ️️results of subsidies tariffs, subsidies, import quotas, voluntary export restraints, local content requirement, antidumping policies - ️️6 instruments of trade policy tariff - ️️a tax levied on imports that effectively raises the cost of imported products relative to domestic products increases govt revenues, protects domestic producers from foreign competitors, proproducer, anti-consumer - ️️results of tariffs detraction - ️️tax levied on exports that drops the price of the product sold in the country increases govt revenues, protects domestic consumers, may make producers noncompetitive, pro-consumer, anti-producer - ️️results of detractions specific tariff - ️️A tariff levied as a fixed charge for each unit of a good imported ad valorem tariff - ️️A tariff levied as a proportion of the value of the imported good subsidy - ️️govt payment to domestic producers free trade - ️️govt does not attempt to restrict what its citizens can buy from another country or sell to another country import quotas - ️️impose limit to quantity importedtariff rate quote - ️️tax levied to imported products above quota voluntary export restraints (VER) - ️️impose limits to exports from one country antidumping policies - ️️designed to punish foreign firms that engage in dumping dumping - ️️selling goods in a foreign market below their cost of production or below their "fair" market value protects domestic producers - ️️results of antidumping policies protect jobs and industries, protect industries important for national security, retaliation to stop unfair practices, protect consumers from unsafe products, advance foreign policy objectives, protect human rights - ️️why do govts intervene in int'l trade? POLITICAL ARGUMENTS infant industry, strategic trade policy - ️️why do govts intervene in int'l trade? ECONOMIC ARGUMENTS infant industry - ️️an industry should be protected until it can develop and be viable and competitive internationally foreign direct investment - ️️when a firm invests directly in new facilities to produce or market in foreign countries greenfield investment - ️️establishment of a wholly owned new operation in a foreign country acquisition/merging - ️️acquisition of/merging w a firm in a foreign country firms fear protectionist policies, shift towards democratic policies and free markets, globalization - ️️3 reasons why FDI is growing so rapidly limitations of exporting, limitations of licensing - ️️why do we see FDI? (2 reasons) transportation costs are high, trade barriers are high - ️️FDI favored over exporting when... firm wants control over technological know-how, firm wants control over operations and business strategy, firms capabilities not amenable to licensing - ️️FDI favored over licensing when...strategic behavior, eclectic paradigm, location specific advantages and externalities - ️️why do firms engage in FDI? (3 reasons) radical view - ️️the MNE is an instrument of imperialist domination and a tool for exploiting host countries to the exclusive benefit of their capitalist-imperialist home countries total opposition view - ️️radical view is...