Chapter 18 - International Trade and Public Policy

Import restrictions

________ create an incentive to smuggle goods.

Predatory Pricing

________ is a firm that sells a product at a price below its production cost to drive a rival out of business and then increases the price.

Smoot Hawley

When the ________ tariffs were implemented in the 1930s, the average U.S. tariff was a whopping 59 % of a products price.

alternative

A(n) ________ to a quota or a VER is an import tariff, which is a tax on an imported goods.

APEC

In 1994, ________ signed a non- binding agreement to reduce trade barriers among nations.

Canada

It eliminates all tariffs and other trade barriers between ________, Mexico, and other United States.

international trade agreements

Dumping is a situation in which the price a firm charges in foreign market is lower than either the price it charges in its home markets or the production cost which is illegal under ________.

productivity

Learning by doing is the knowledge and skills workers gain during production that increase ________ and lower cost.

European Union

The ________ (EU) was designed to remove all trade barriers within Europe and create a single market.

Import quota

________ is a government imposed limit on the Quinn of a good that can be imported.

lower opportunity cost

The nation with the __________ has a comparative advantage in producing that good.

comparative advantage

It is ___________ that matters for trade-not absolute advantage, the ability of a nation to produce a particular good at a lower absolute cost than that of another nation.

Learning by doing

_____________ is the knowledge and skills workers gain during production that increase productivity and lower cost.

Infant

_________ industries are the industries that are at an early stage of development.

General Agreement on Tariffs and Trade

The _______________________ (GATT) is an international agreement established in 1947 that has lowered trade barriers between the United States and other nations.

World Trade Organization

The ______________________(WTO) is an organization established in 1995 that oversees GATT and other international trade agreements, resolves trade disputes, and holds forums for further rounds of trade negotiations.

North American Free Trade Agreement

The __________________ (NAFTA) took effect in 1994 and was implemented over a 15-year period. It eliminates all tariffs and other trade barriers between Canada, Mexico, and other United States.

Terms of trade

____________ is the rate at which units of one product can be exchanged for units of another product.

lower opportunity cost

The nation with the ______________ has a comparative advantage in producing that good.

comparative advantage

It is ____________ that matters for trade-not absolute advantage, the ability of a nation to produce a particular good at a lower