Title: Cat for Lesson 8 - International Trade
Course: 383-303-FD-55-01 • International Economics

Test info catégorie

Question

International trade theories attempt to explain why countries trade with each other. The first theory is the absolute advantage theory. Explain this theory, which was developed by Adam Smith in the 18th century.

Entrez votre réponse ci-dessous.
Feedback: This theory claims that each country has an absolute advantage in the production of some particular goods. In other words, each country produces those goods more efficiently in comparison to the production of the same goods by other countries. If each country specializes in producing the goods for which it has an absolute advantage and products are traded between countries, the result is an increase in world production.
Feedback: This theory claims that each country has an absolute advantage in the production of some particular goods. In other words, each country produces those goods more efficiently in comparison to the production of the same goods by other countries. If each country specializes in producing the goods for which it has an absolute advantage and products are traded between countries, the result is an increase in world production.

True or false? Justify your answer.

Question

Even if a country has an absolute advantage over another country in all sectors, Smith points out that it can be advantageous for both countries to trade with each other, provided that the first country specializes in the production for which it has the greatest advantage and that the second country specializes in the production for which it has the smallest disadvantage.

Sélectionnez la meilleure réponse puis justifiez votre choix.

Réponse | Choix de réponses
1 | True
2 | False

Justification
Feedback: La(es) bonne(s) réponse(s) est(sont): 2, This explanation reflects Ricardos theory and not Smiths.
Feedback: La(es) bonne(s) réponse(s) est(sont): 2, This explanation reflects Ricardos theory and not Smiths.

True or false? Justify your answer.

Question

Heckscher, Ohlin and Rybczynski's theories expand on Ricardo's theory and deal with the abundance and cost of production factors in countries involved in trade.

Sélectionnez la meilleure réponse puis justifiez votre choix.

Réponse | Choix de réponses
1 | True
2 | False

Justification
Feedback: La(es) bonne(s) réponse(s) est(sont): 1, The Heckscher-Ohlin theory deals with the concept of production factor endowment, whereas Rybczynskis theory deals with the fact that countries can vary the relative abundance of factors to promote their development.
Feedback: La(es) bonne(s) réponse(s) est(sont): 1, The Heckscher-Ohlin theory deals with the concept of production factor endowment, whereas Rybczynskis theory deals with the fact that countries can vary the relative abundance of factors to promote their development.

Question

What does protectionism mean?

Entrez votre réponse ci-dessous.
Feedback: Protectionism primarily aims to reduce imports from abroad and protect certain sectors from foreign competition. There are two distinct types of protection mechanisms that countries implement: customs tariffs and non-tariff barriers (NTBs).
Feedback: Protectionism primarily aims to reduce imports from abroad and protect certain sectors from foreign competition. There are two distinct types of protection mechanisms that countries implement: customs tariffs and non-tariff barriers (NTBs).

Q: Question

Indicate whether these statements are true or false.

Sélectionnez la bonne réponse pour chaque énoncé.

Taxing a foreign product as soon as it arrives at the border is a good example of non-tariff barriers (NTBs).
[...] The introduction of a customs duty can have the following consequences: price increase in the imported product, reduction in quantities imported; increase in public revenues, increase in sales by local producers.[...]
A: Faux; Vrai
Gap 1 offers: Vrai; Faux
Gap 2 offers: Vrai; Faux

Q: Question

Match these forms of non-tariff barriers with their definition (or example).
- Import quotas | For a long time, Canada did not allow gold imports in order to protect its mining industry.
- Voluntary restraint agreements | Japan has to limit the number of cars it sells in North America.
- Restrictive standards | Japanese videotape recorders were sent through Poitiers in central France to clear customs.
- Excessive customs formalities | The import of cheese made from raw milk is allowed only under certain conditions in Canada; the French say that we are poor connoisseurs.
- Dumping | By lowering interest rates or granting credit, our local producers are given advantages.
- Subsidies for exporters | We sell our products abroad at a lower price than that offered on our local markets.
If right: You have made the right associations.
If partly right: Votre réponse est partiellement correcte.
If wrong: Here is how you should have answered: 1. Voluntary restraint agreement D. Japan has to limit the number of cars it sells in North America. 2. Import quotas C. For a long time, Canada did not allow gold imports in order to protect its mining industry. 3. Subsidies for exporters A. By lowering interest rates or granting credit, our local producers are given advantages. 4. Dumping E. We sell our products abroad at a lower price than that offered on our local markets. 5. Excessive customs formalities F. Japanese videotape recorders were sent through Poitiers in central France to clear customs. 6. Restrictive standards B. The import of cheese made from raw milk is allowed only under certain conditions in Canada; the French say that we are poor connoisseurs.

Q: Question

Indicate whether these statements are true or false.

Sélectionnez la bonne réponse pour chaque énoncé.

The emerging industry argument is used to support protectionist measures aimed at protecting a country's young industries from foreign competition.
[...] The argument of reprisal measures against countries that grant their exporters certain benefits (subsidies, no taxes, etc.) is frequently used by countries that promote protectionism.
[...] Export subsidies distort the playing field for competition in favour of the country that provides these subsidies.[...]
A: Vrai; Vrai; Vrai
Gap 1 offers: Vrai; Faux
Gap 2 offers: Vrai; Faux
Gap 3 offers: Vrai; Faux