Chapter 7: Government Policy and International Trade

Flashcards summarizing key concepts related to government policy and international trade.

What are local content requirements (LCR)?

Requirements that demand that a specific fraction of goods be produced domestically

List political arguments for government intervention in trade.

Protects jobs and industries, national security, and helps achieve political objectives

Identify two implications for managers of developments in the world trading system.

Trade barriers can raise costs and influence firm strategies, while government interventions may affect competitiveness.

What is an export tariff?

a tax placed on the export goods to ensure supply in home country

What is an export ban?

A policy that restricts the export of a good to ensure supply in home country

What is a tariff rate quota?

A hybrid of a quotas and tariff, where a lower tariff is applied to imports within the quota than to those over the quota

What are administrative policies?

Rules designed to make is difficult for imports to enter country