b. the Smoot–Hawley tariff
c. the Blair-Bush tariff
d. the International Equity tariff
ANSWER: b
86. Other nations responded to the Smoot–Hawley tariff by:
a. complaining to the United Nations.
b. raising tariffs on imports in retaliation.
c. lowering prices on exports in order to increase sales.
d. attacking military bases in nations that refused to lower tariffs.
ANSWER: b
87. What is an import quota?
a. a limit on the quantity of a certain import
b. a tax on the value of an import
c. a health or safety precaution affecting goods that may cause long-term harm to humans or animals
d. a bureaucratic rule that can be overridden by the secretary for international trade
ANSWER: a
88. What is the immediate effect of increasing tariffs on a country’s economy?
a. It increases the volume of trade.
b. It reduces the volume of imports.
c. It increases the volume of exports.
d. It promotes better trade relations with other countries.
ANSWER: b
89. Import restrictions in the form of import tariffs and import quotas are supported by:
a. the industrial sector of the tariff-imposing country.
b. the import sector of the foreign country.
c. the production sector in the tariff-imposing country that uses imported intermediate input.
d. the sector of the tariff-imposing country that produces the final good.
ANSWER: d
90. Between 2018 and 2019, average U.S. tariffs:
a. increased substantially.
b. decreased substantially.
c. remained unchanged.
d. could not be measured.
ANSWER: a
91. What ushered in the “second golden age” of trade?
a. the increase in trade among countries in the period after World War II
b. the introduction of the gold standard
c. the increase in trade restrictions as a reaction to the Smoot–Hawley Tariff Act
d. the decline in volume of trade among industrialized countries
ANSWER: a
92. Which of the following did not result in increased trade between 1945 and 1960?
a. the end of World War II
b. tariff reductions under the General Agreement on Tariffs and Trade
c. export subsidies
d. lower transportation costs
ANSWER: c
93. Most countries saw a significant drop in international trade between 2008 and 2009. What was the cause of that temporary reduction?
a. the Smoot–Hawley Tariff Act
b. September 11
c. the creation of the World Trade Organization
d. the Global Financial Crisis
ANSWER: d
94. After 1945, world trade:
a. grew more slowly than in the decade before World War II.
b. grew more rapidly than in the decade before World War II.
c. grew in absolute dollar terms but not as a ratio of GDP.
d. fell in both absolute and relative terms.
ANSWER: b
95. What was the 1956 invention that increased the volume of world trade by lowering the cost of shipping?
a. the personal computer
b. the bar code
c. bubble wrap
d. the shipping container
ANSWER: d
96. During the 2008–09 financial crisis, what happened to the ratios of trade to GDP for most developed nations?
a. They rose.
b. They fell.
c. They did not change.
d. We do not have enough data yet to say what happened.
ANSWER: b
97. What caused the decline in trade during the 2008–09 financial crisis?
a. rising house prices, which took up more consumer income
b. recessions in many countries that reduced both exports and imports
c. greater productivity in the developing countries
d. pirate activity off the coast of Africa
ANSWER: b
98. The U.S.–China trade war has led to: