University of Luzon (College of Accountancy) Summer 2022-2023

FIN-203
QUIZ 7 (Chapter 7: Government Policy and International Trade)

Name: _________________________ Block A July 20, 2023

I.
Porter’s Diamond: (they each play off each other)
1. Factor Endowments
2. Demand Conditions
3. Related and Supporting Industries
4. Firm Strategy, Structure, and Rivalry

Free trade 5. The absence of barriers to the free flow of goods and services between
countries.

II.
B 6. The situation where a government does not attempt to restrict what its citizens can buy
from another country or what they can sell to another country.
a. Free Trade Agreement
b. Free Trade
c. International trade
d. Regional trade

C 7. The free trade agreement in Southeast Asia (ASEAN) is

a. NAFTA
b. DR-CAFTA
c. AFTA
d. EPA

A 8. The demands that some specific fraction of a good be produced domestically is one of
the government intervention in international trade in the term of
a. Local content requirements
b. Subsidies
c. Voluntary export restraints
d. Administrative policies

D 9. A tax levied as a proportion of the value of the imported good is the definition of
a. Tariffs
b. Specific tariffs
c. Import quotas
d. Ad valorem tariffs

A 10. A direct restriction on the quantity of some good that may be imported into a country
a. Import quota
b. Tariff rate quota
c. Voluntary export restraint
 d. Quota rent

B 11. The bellow are kind of political argument for government intervention in trade, except:
a. Protecting jobs and industries
b. Strategic trade policies
c. National security
d. Furthering foreign policy objectives

B 12. General Agreements on Tariffs and Trade was established in

a. 1945
b. 1947
c. 1957
d. 1974

C 13. The WTO's focus concerned with the high level of tariffs and subsidies in the
agricultural sector of many economies is WTO's currently focusing on
a. Anti-dumping policies
b. Market access
c. Protecting in agriculture
d. Protecting intellectual property

B 14. A new round of talks Doha focusing on these term, except

a. Cutting tariffs on industrial goods and service
b. Increasing subsidies
c. Reducing barriers to cross-border investment
d. Limiting the use of anti-dumping laws

C 15. Trade barriers can limit a firm's ability to disperse production globally in these term,
except
a. Trade barriers raise the cost of exporting
b. Firms may have to locate production activities
c. Trade barriers raise the firm's profit
d. The threat of future trade barriers can influence firm strategy