IBM - Government Intervention

What are the main reasons why governments intervene in trade?

• Only economic motives

• Political, economic, and cultural motives

• Only political motives

• Only cultural motives

Which instrument of trade promotion involves providing financial assistance to domestic producers?

• Special government agencies

• Export assistance

• Foreign trade zones

• Subsidies

What is the purpose of local content requirements in trade?

• To increase imports

• To eliminate competition

• To reduce domestic production

• To force firms to use local resources

Which trade restriction involves a complete ban on trade with a particular country?

• Tariffs

• Quotas

• Embargoes

• Local content requirements

What was the purpose of the General Agreement on Tariffs and Trade (GATT)?

• To increase tariffs

• To restrict imports

• To reduce trade barriers

• To promote dumping

Which government instrument is responsible for promoting exports and organizing trips to meet potential business partners?

• Subsidies

• Export assistance

• Foreign trade zones

• Special government agencies

What is the main purpose of tariffs in trade?

• To protect domestic producers

• To reduce government revenue

• To lower production costs

• To increase imports

Which trade restriction involves imposing a restriction on the amount of a good that can enter or leave a country?

• Embargoes

• Tariffs

• Quotas

• Local content requirements

What is the purpose of administrative delays in trade?

• To increase efficiency

• To facilitate customs procedures

• To impair the flow of imports

• To speed up imports

Which trade restriction involves selling goods below their cost of production in a foreign market?

• Antidumping policies

• Embargoes

• Quotas

• Tariffs