Question : Article Summary Roberto Azevedo, director-general of the World Trade Organization (WTO), : 1387682

Article Summary

Roberto Azevedo, director-general of the World Trade Organization (WTO), reported that global trade growth estimates will be lowered for 2013 and 2014 because of increasing global protectionism. The current protectionism is based primarily in regulations rather than the more common tariffs and subsidies. Since 2008, almost 700 new trade restrictions have materialized – over 150 of those in 2012 alone – with Russia being singled out as one of the primary offenders.

Source: Kiran Moodley, “WTO warns of trade slowdown due to protectionism,” CNBC, September 6, 2013.

20) Refer to the Article Summary. The protectionism being granted to Russian firms will cause the greatest harm to

A) Russian manufacturers.

B) the Russian government.

C) manufacturers who export to Russia.

D) Russian consumers.

21) In the United States during the Great Depression, tariffs were ________ than they were following World War II, and ________ than they are today.

A) higher; higher

B) higher; lower

C) lower; higher

D) lower; lower

22) The Smoot-Hawley Tariff

A) lowered U.S. tariffs by 50 percent following World War II.

B) was passed by the U.S. Congress following the Civil War as a means of increasing government revenue.

C) was passed by the U.S. Congress upon a recommendation made by the General Agreement on Tariffs and Trade (GATT) in 1948.

D) raised average tariff rates by over 50 percent in the United States in 1930.

23) In 1930, the U.S. government attempted to help domestic firms that were harmed by the Great Depression by passing the Smoot-Hawley Tariff. In response to this tariff, other countries ________ and international trade ________.

A) lowered their tariffs; thrived

B) raised their tariffs; collapsed

C) eliminated tariffs; began to grow outside of the United States

D) doubled their tariffs; became unrestricted

24) In 1995, the General Agreement on Tariffs and Trade (GATT), which was established in 1948, was replaced by the World Trade Organization (WTO). Why did members of the GATT push for the establishment of the WTO?

A) The GATT agreement only covered trade in goods. The WTO was created to cover trade in goods, services and intellectual property.

B) The charter of the GATT had run out and a new organization was needed to promote international trade.

C) The creation of the European Union (EU) made the GATT obsolete. The WTO was formed to regulate trade between the EU and other nations.

D) By 1995 tariffs had been eliminated. The WTO was created to reduce non-tariff trade barriers.

25) The World Trade Organization (WTO) promotes foreign trade and investment, or globalization. In recent years opposition to globalization has led to violent protests at meetings of the WTO. All of the following are reasons for these anti-globalization protests except

A) protestors believe the WTO favors the interests of high-income countries at the expense of lower-income countries.

B) protesters believe that tariffs are needed to protect domestic firms from foreign competition.

C) protesters believe that free trade destroys the distinctive cultures of many countries.

D) protesters object to the loss of intellectual property (such as software programs and movies) that results from foreign trade and investment.

26) Prior to the 1998 World Cup, France banned the use of all soccer balls made by child workers. Several economists criticized the ban. Which of the following is an argument these economists used to justify the use of child labor in some countries?

A) Soccer balls are easy to carry and workers were given soccer balls to play with.

B) Child workers were allowed to attend school during the periods they worked.

C) Child workers were given gloves to protect their hands while they stitched soccer balls.

D) Some of the alternatives to stitching soccer balls include begging and prostitution.

27) Protectionism is the use of ________ to protect domestic firms from foreign competition.

A) military force

B) trade barriers

C) cheap labor

D) dumping

28) Your roommate Hansen argues that American producers cannot compete with foreign producers because wages are lower in foreign countries than in the United States. Hansen

A) is incorrect. Free trade raises living standards by increasing economic efficiency.

B) is right in asserting the need to protect high wages if the United States wishes to maintain its high standard of living.

C) is correct in arguing that the high wages of U.S. workers make it impossible to compete with workers in low-wage countries.

D) is advancing the anti-dumping argument for protectionism.

29) Many economists ________ protectionism because it ________ consumers and ________ jobs in domestic industries that use protected products.

A) support; benefits; creates

B) criticize; causes losses to; eliminates

C) support; lowers prices for; raises wages for

D) criticize; unfairly rewards; relocates