Podcast
Questions and Answers
What is one of the main reasons for imposing high tariffs on imports?
What is one of the main reasons for imposing high tariffs on imports?
- To increase government spending
- To promote foreign investments
- To increase exports
- To reduce imports of luxury products (correct)
Specific tariffs vary depending on the value of the imported goods.
Specific tariffs vary depending on the value of the imported goods.
False (B)
What are the two main groups that gain when a small country imposes a tariff?
What are the two main groups that gain when a small country imposes a tariff?
Domestic producers and government
The mercantilistic argument for tariffs is known as the ______ argument.
The mercantilistic argument for tariffs is known as the ______ argument.
Match the following terms related to tariffs with their definitions:
Match the following terms related to tariffs with their definitions:
Which statement is true regarding the terms-of-trade argument for tariffs?
Which statement is true regarding the terms-of-trade argument for tariffs?
Tariff revenues contribute significantly to the government budget.
Tariff revenues contribute significantly to the government budget.
Name one effect of imposing import tariffs.
Name one effect of imposing import tariffs.
When a country introduces tariffs, ______________________ will lose.
When a country introduces tariffs, ______________________ will lose.
Identify a key difference between the 'small country' and 'large country' models regarding tariffs.
Identify a key difference between the 'small country' and 'large country' models regarding tariffs.
What is the primary goal of a passive foreign trade policy?
What is the primary goal of a passive foreign trade policy?
A protective tariff serves to generate significant government income.
A protective tariff serves to generate significant government income.
What type of tariff can BiH introduce if foreign exporters sell products at lower prices in their own market compared to BiH's market?
What type of tariff can BiH introduce if foreign exporters sell products at lower prices in their own market compared to BiH's market?
The type of tariff imposed to block imports completely is called a ______.
The type of tariff imposed to block imports completely is called a ______.
What was the purpose of high tariff rates on car imports in many Latin American countries during the 1970s?
What was the purpose of high tariff rates on car imports in many Latin American countries during the 1970s?
BiH can introduce a specific tariff to protect its domestic production from foreign competition.
BiH can introduce a specific tariff to protect its domestic production from foreign competition.
What situation might lead BiH to impose a prohibitive tariff?
What situation might lead BiH to impose a prohibitive tariff?
Match the type of tariff to its purpose:
Match the type of tariff to its purpose:
Flashcards
Passive Foreign Trade Policy Goal
Passive Foreign Trade Policy Goal
Allows free market forces to determine trade flows without government intervention.
Protective Tariff (Latin America Car Imports)
Protective Tariff (Latin America Car Imports)
Tariff designed to shield domestic industries, especially those not yet established, from foreign competition.
Antidumping Tariff
Antidumping Tariff
Temporary tariff to counter unfair trade practices, like selling goods below cost in a foreign market.
Prohibitive Tariff
Prohibitive Tariff
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BiH Foreign Trade Policy (Counter-measures)
BiH Foreign Trade Policy (Counter-measures)
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Antidumping Tariff Purpose
Antidumping Tariff Purpose
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Prohibitive Tariff Application in BiH
Prohibitive Tariff Application in BiH
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Protective Tariff Purpose
Protective Tariff Purpose
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Import Tariff
Import Tariff
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Specific Tariff
Specific Tariff
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Ad Valorem Tariff
Ad Valorem Tariff
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Small Country Model (Tariffs)
Small Country Model (Tariffs)
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Large Country Model (Tariffs)
Large Country Model (Tariffs)
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Terms-of-Trade Argument (Tariffs)
Terms-of-Trade Argument (Tariffs)
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Mercantilism
Mercantilism
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Effects of Import Tariffs
Effects of Import Tariffs
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Tariff Revenue
Tariff Revenue
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Infant Industry Argument
Infant Industry Argument
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Study Notes
Passive Foreign Trade Policy
- Aims to regulate trade without government intervention, letting market forces determine trade flows.
Protective Tariffs in Latin America (1970s)
- High tariffs on imported cars despite no domestic car industry.
- Intended to protect nonexistent domestic industries and encourage import substitution.
Antidumping Tariffs (BiH)
- Implemented when exporters sell products cheaper abroad than domestically.
- Used as a countermeasure against large import volumes affecting domestic production..
Prohibitive Tariffs (BiH)
- Used when a country lacks foreign currency to pay for imports.
- Implemented to curb imports of luxury goods.
Specific Import Tariffs
- A fixed amount per unit irrespective of the value of the imported goods.
Effects of Import Tariffs
- Increased prices for consumers.
- Increased government revenue .
- Protected domestic producers.
- Reduced overall trade volume
Small Country vs. Large Country Tariffs
- Small countries cannot significantly affect foreign prices.
- Large countries can influence foreign prices
Mercantilist Argument for Tariffs
- Focuses on accumulating domestic wealth by limiting imports.
Terms-of-Trade Argument for Tariffs
- Only valid for large countries able to affect foreign prices.
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