What is not an example of monetary policy?
Options
A a rise in import tariffs on manufactured goods
B a rise in interest rates by the central bank
C a rise in credit regulations
D a rise in the money supply
Which statement correctly describes a tariff?
Options
A It is a complete ban on imports.
B It is a minimum price for domestic producers.
C It is a payment to exporters.
D It is a tax imposed on imports.
Which statement is not a valid reason why a country may impose protectionist measures?
Options
A to allow a newly developed domestic industry to grow to a viable size
B to enable a country to retain control of an industry it regards as being of strategic importance
C to give consumers a wider choice of goods and services
D to give time for workers in a declining domestic industry to find alternative employment
Which argument in favour of protectionism is not generally regarded as economically valid?
Options
A Once the protected industry becomes established, it will produce efficiently.
B It prevents heavily subsidised imports from competing unfairly against domestic goods.
C It provides time for the protected industry’s workers to be retrained for other work.
D It increases the standard of living of the population in general.
A government increases the import quota of cars.
What is the likely effect of this?
Options
A jobs will be created in the domestic car industry
B prices of cars will fall for domestic consumers
C specialisation is reduced
D trading partners will retaliate
A country has a current account deficit.
What would be classified as a protectionist measure to restore the current account to equilibrium?
Options
A allow the exchange rate to appreciate
B increase income tax
C increase import tariffs
D increase the rate of interest
For which government measure would both the outcomes shown be likely to benefit its economy?
Options
| government measure | outcome 1 | outcome 2 | |
|---|---|---|---|
| A | embargoes | protect against import of harmful materials | encourage illegal trade and corruption |
| B | export subsidies | give home producers a cost advantage | are a drain on government expenditure |
| C | import quotas | restrict volume of expensive imports | reduce balance of payments deficit |
| D | tariffs | protect some jobs by raising import prices | cause unemployment due to rising costs of imported raw materials |
In which economic context is the term ‘protectionism’ usually applied?
Options
A the protection of consumers against excessive prices
B the protection of employees against exploitation by multinational companies
C the protection of local producers against international competitors
D the protection of the foreign exchange rate against currency speculators
A government decides to allow the country’s currency to depreciate to remove the deficit on its current account of the balance of payments.
What is the most likely reason why this would not work?
Options
A The country gains a competitive advantage from the depreciation.
B The country has a surplus on its capital and financial accounts.
C The price elasticities of demand for the country’s exports and imports are greater than one.
D There are high trade barriers with the country’s main trading partners.
What is not an example of protectionism?
Options
A export subsidies
B import subsidies
C quotas
D tariffs