General International Trade Concepts
1. Which of the following is an example of a tariff barrier to trade? a) Import taxes
b) Product standards
c) Export subsidies
d) Trade quotas
Answer: a) Import taxes
2. Non-tariff barriers to trade, such as product standards, are primarily used to: a) Reduce
consumer costs
b) Ensure product safety and quality
c) Promote foreign competition
d) Reduce environmental regulations
Answer: b) Ensure product safety and quality
3. Export promotion policies aim to: a) Increase import taxes
b) Subsidize domestic producers for exporting goods
c) Restrict international trade
d) Implement stricter product standards for imports
Answer: b) Subsidize domestic producers for exporting goods
Product Standards and Protectionism
4. Product standards can serve as a protectionist measure because: a) They reduce fixed costs
for foreign producers.
b) They increase compliance costs for exporters.
c) They make trade easier for developing countries.
d) They eliminate the need for tariffs.
Answer: b) They increase compliance costs for exporters.
5. Which of the following is not a reason for implementing product standards? a) To protect
consumer health
b) To monitor environmental impacts
c) To simplify trade for exporters
d) To address asymmetric information in markets
Answer: c) To simplify trade for exporters
6. A high product standard set strategically by a developed country is likely to: a) Reduce trade
barriers for all countries.
b) Prevent entry of developing country exporters.
c) Increase market failures.
d) Eliminate lobbying pressures.
Answer: b) Prevent entry of developing country exporters.
, Hidden Protectionism
7. During the Subprime Crisis, hidden protectionism in the U.S. included: a) Reduced
inspections by the FDA
b) Increased import refusals based on product standards
c) Elimination of all tariffs
d) Removal of product compliance rules
Answer: b) Increased import refusals based on product standards
8. Hidden protectionism is often linked to: a) Transparent trade practices
b) Declining unemployment rates
c) Counter-cyclical economic conditions
d) Expansion of trade agreements
Answer: c) Counter-cyclical economic conditions
Institutional Background
9. The U.S. Food and Drug Administration (FDA) can refuse imports if: a) The product fails
WTO quality tests
b) The product appears to violate U.S. standards
c) A foreign government does not approve of the shipment
d) The product complies with domestic standards
Answer: b) The product appears to violate U.S. standards
10.Which method does the FDA primarily use for import inspections? a) Risk-based criteria
and laboratory tests
b) Random checks without guidelines
c) WTO-directed inspections
d) National control plans
Answer: a) Risk-based criteria and laboratory tests
Trade Policy Models
11.In a standard gravity model of trade, the dependent variable is typically: a) Trade tariffs
b) GDP growth
c) Import volumes
d) Compliance rates
Answer: c) Import volumes
12.What is one assumption of the gravity model in international trade? a) Trade flows increase
with distance between countries.
b) Larger economies trade less with each other.
c) Trade flows are proportional to economic size and inversely related to distance.
d) Non-tariff barriers have no effect on trade flows.
1. Which of the following is an example of a tariff barrier to trade? a) Import taxes
b) Product standards
c) Export subsidies
d) Trade quotas
Answer: a) Import taxes
2. Non-tariff barriers to trade, such as product standards, are primarily used to: a) Reduce
consumer costs
b) Ensure product safety and quality
c) Promote foreign competition
d) Reduce environmental regulations
Answer: b) Ensure product safety and quality
3. Export promotion policies aim to: a) Increase import taxes
b) Subsidize domestic producers for exporting goods
c) Restrict international trade
d) Implement stricter product standards for imports
Answer: b) Subsidize domestic producers for exporting goods
Product Standards and Protectionism
4. Product standards can serve as a protectionist measure because: a) They reduce fixed costs
for foreign producers.
b) They increase compliance costs for exporters.
c) They make trade easier for developing countries.
d) They eliminate the need for tariffs.
Answer: b) They increase compliance costs for exporters.
5. Which of the following is not a reason for implementing product standards? a) To protect
consumer health
b) To monitor environmental impacts
c) To simplify trade for exporters
d) To address asymmetric information in markets
Answer: c) To simplify trade for exporters
6. A high product standard set strategically by a developed country is likely to: a) Reduce trade
barriers for all countries.
b) Prevent entry of developing country exporters.
c) Increase market failures.
d) Eliminate lobbying pressures.
Answer: b) Prevent entry of developing country exporters.
, Hidden Protectionism
7. During the Subprime Crisis, hidden protectionism in the U.S. included: a) Reduced
inspections by the FDA
b) Increased import refusals based on product standards
c) Elimination of all tariffs
d) Removal of product compliance rules
Answer: b) Increased import refusals based on product standards
8. Hidden protectionism is often linked to: a) Transparent trade practices
b) Declining unemployment rates
c) Counter-cyclical economic conditions
d) Expansion of trade agreements
Answer: c) Counter-cyclical economic conditions
Institutional Background
9. The U.S. Food and Drug Administration (FDA) can refuse imports if: a) The product fails
WTO quality tests
b) The product appears to violate U.S. standards
c) A foreign government does not approve of the shipment
d) The product complies with domestic standards
Answer: b) The product appears to violate U.S. standards
10.Which method does the FDA primarily use for import inspections? a) Risk-based criteria
and laboratory tests
b) Random checks without guidelines
c) WTO-directed inspections
d) National control plans
Answer: a) Risk-based criteria and laboratory tests
Trade Policy Models
11.In a standard gravity model of trade, the dependent variable is typically: a) Trade tariffs
b) GDP growth
c) Import volumes
d) Compliance rates
Answer: c) Import volumes
12.What is one assumption of the gravity model in international trade? a) Trade flows increase
with distance between countries.
b) Larger economies trade less with each other.
c) Trade flows are proportional to economic size and inversely related to distance.
d) Non-tariff barriers have no effect on trade flows.
