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AGB 302 Ch 7 Exam Questions and Answers 2024
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AGB 302 Ch 7 Exam Questions and Answers
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AGB 302 Ch 7 Exam Questions andAnswers
Free Trade - Answer -refers to a situation in which a government does not attempt to
restrict what its citizens can buy from or sell to another country
General Agreement on Tariffs and Trade (GATT) - Answer -creations of a series of
multinational treaties; predecessor of WTO; the emergence of the modern international
trading system is based on this
Tariff - Answer -a tax levied on imports (or exports)
Specific Tariffs - Answer -levied as a fixed charge for each unit of a good imported (e.g., $3
per barrel of oil)
Ad valorem tariffs - Answer -are levied as a proportion of the value of the imported good
Subsidy - Answer -a government payment to a domestic producer; take many forms,
including cash grants, low-interest loans, tax breaks, and government equity participation
in domestic firms
Import Quota - Answer -a direct restriction on the quantity of some good that may be
imported into a country; the restriction is usually enforced by issuing import licenses to a
group of individuals or firms
Tariff Rate Quota - Answer -a lower tariff rate is applied to imports within the quota than
those over the quota. For example, an ad valorem tariff rate of 10 percent might be levied
on 1 million tons of rice imports into South Korea, after which an out-of-quota rate of 80
percent might be applied.
Voluntary Export Restraint (VER) - Answer -is a quota on trade imposed by the exporting
country, typically at the request of the importing country's government. For example, in
2012 Brazil imposed what amounts to voluntary export restraints on shipments of vehicles
from Mexico to Brazil.
Quota Rent - Answer -The extra profit that producers make when supply is artificially
limited by an import quota
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