MGMT 450 Final - Chapter 9

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1. 
Free Trade
 
Implies that the national government exerts minimal influence on the exporting and importing decisions of private firms and individuals
 
2. 
Fair Trade/Managed Trade
 
Suggests that the national government should actively intervene to ensure that domestic firms' exports receive an equitable share of foreign markets and that imports are controlled to minimize losses of domestic jobs and market share in specific industries
 
3. 
National Defense Argument
 
A country must be self-sufficient in critical raw materials, machinery, and technology or else be vulnerable to foreign threats
 
4. 
Infant Industry Argument
 
Argument in favor of governmental intervention in trade: a nation should protect fledgling industries for which the national will ultimately possess a comparative advantage
 
5. 
Strategic Trade Theory
 
Suggests that a national government can make its country better off if it adopts trade policies that improve the competitiveness of its domestic firms in certain oligopolistic industries
 
6. 
Export Promotion Strategy
 
A country encourages firms to compete in foreign markets by harnessing some advantage the country possesses, such as low labor costs. Also encourages the diversification of exports.
 
7. 
Import Substitution Strategy
 
Encourages the growth of domestic manufacturing industries by erecting high barriers to imported goods
 
8. 
Industrial Policy
 
The national government identifies key domestic industries critical to the country's future economic growth and then formulates programs that promote their competitiveness
 
9. 
Public Choice Analysis
 
A branch of economics that analyzes public decision making. The special interest will often dominate the general interest on any given issue for a simple reason: special-interest groups are willing to work harder for the passage of laws favorable to their interests than the general public is willing to work for the defeat of laws unfavorable to its interests,
 
10. 
Tariffs
 
A tax placed on a good that is traded internationally
 
11. 
Non-tariff Barriers
 
Any government regulation, policy, or procedure other than a tariff that has the effect of impeding international trade
 
12. 
Export tariff
 
Levied as the goods leave the country
 
13. 
Transit tariff
 
Levied as the goods pass through one country bound for another
 
14. 
Import tariff
 
Collected on imported goods
 
15. 
Ad valorem tariff
 
Assessed as a percentage of market value of the imported goods
 
16. 
Specific tariff
 
Assessed as a specific dollar amount per unit of weight or other standard
 
17. 
Compound tariff
 
Has both an ad valorem and specific tariff component
 
18. 
Quota
 
A numerical limit on the quantity of a good that may be imported into a country during some time period, such as a year
 
19. 
Tariff Rate Quota (TRQ)
 
Imposes a low tariff rate on a limited amount of imports of a specific good; above that threshold, imposes a prohibitively high tariff rate on the good
 
20. 
Voluntary Export Restraint (VER)
 
A promise by a country to limit its exports of a good to another country to a pre-specified amount or percentage of the affected market
 
21. 
Embargo
 
An absolute ban on the exporting (and/or importing) of goods to a particular destination
 
22. 
Foreign Trade Zone (FTZ)
 
A geographic area where imported or exported goods receive preferential tariff treatment
 
23. 
Countervailing duties
 
Ad valorem tariff on an imported good to counter the impact of foreign subsidies
 
24. 
Anti-dumping regulations
 
Two types of dumping: (1) international price discrimination, (2) predatory pricing