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REVIEW ON TRADE POLICY OF DEVELOPING NATIONS Flashcards | StudBud
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REVIEW ON TRADE POLICY OF DEVELOPING NATIONS
REVIEW ON TRADE POLICY OF DEVELOPING NATIONS
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1
Which method is used to stabilize the prices of primary products?
Free market auctions
International commodity agreements
OPEC price caps
Floating exchange rates
2
What has been a major challenge for African countries attempting export-led growth?
High foreign direct investment
Low labor supply
Limited infrastructure and logistics
Surplus of raw materials
3
Why did Brazil's electronics industry struggle under import substitution policies?
It became uncompetitive due to lack of innovation
It was too open to foreign ownership
It lacked raw materials
It faced too much foreign competition
4
Which global event in the 2020s reignited discussion about export dependence?
G7 Summit
Tokyo Olympics
US-Mexico-Canada Agreement
COVID-19 pandemic
5
Which international organization lends to developing countries to reduce poverty?
IMF
UNESCO
World Bank
OECD
6
What do buffer stocks aim to do?
Encourage speculation
Raise taxes on exports
Subsidize imports
Stabilize commodity prices
7
Why did OPEC restrict oil output in the 1970s?
To compete with the US shale industry
To comply with UN sanctions
To increase member profits
To protect the environment
8
What is one outcome of developed nations subsidizing agriculture?
Better quality exports
Improved nutrition in developing nations
Higher global food prices
Decreased export revenue in developing nations
9
Which region experienced rapid growth due to export-oriented policies?
East Asia
Middle East
Sub-Saharan Africa
Latin America
10
What is a major characteristic of developing nations' trade patterns?
Exports historically focused on primary products
Highly diversified import sources
Primarily export high-tech goods
Have low dependency on advanced nations
11
What is a drawback of import-substitution industrialization?
Creates inefficient industries
Increases competitiveness
Reduces government interference
Encourages exports
12
What is the purpose of the Generalized System of Preferences?
To eliminate all tariffs
To favor large corporations
To reduce tariffs for developing countries
To impose quotas on exports
13
What is one reason why developing nations experience price volatility in exports?
Large diversified export base
Stable demand curves
High elasticity of demand
Exports concentrated in few primary commodities
14
Which Asian country liberalized its trade policies in the 1980s and saw high growth?
India
Japan
Vietnam
North Korea
15
The "infant industry argument" assumes that new industries
Can compete immediately with foreign firms
Should focus on exporting goods
Require permanent protection
Need temporary support due to market failures
16
What is the major criticism of international aid to developing countries?
It can support corrupt governments
It promotes efficiency
It reduces inequality
It increases transparency
17
Why are countries seeking to diversify away from OPEC oil?
Because of cheaper biofuels
As solar is now free
Due to OPEC's unstable supply practices
To comply with EU emissions rules
18
What event led to falling commodity prices and hurt developing countries' exports in 2007-2008?
The Oil Shock
The Dot-com Bubble
The Great Recession
The Asian Financial Crisis
19
Which recent global trend has made developing nations more vulnerable to price shocks?
Climate change and supply chain disruptions
Cryptocurrency regulations
Artificial Intelligence advancements
Universal Basic Income trials
20
How has trade liberalization affected income distribution in some countries?
Reduced wages
Made it more equal
No change observed
Increased income inequality
21
How might a developing nation increase its resilience to export market volatility?
Peg its currency to a major global currency
Impose strict import quotas
Diversify its economy and export base
Focus exclusively on agricultural exports
22
Why has the IMF been criticized when assisting developing countries?
It avoids transparency
It imposes strict conditions on loans
It increases inflation
It funds military projects
23
Which country's export-led growth is most often used as a model in modern development economics?
Mexico
Brazil
South Korea
Russia
24
Why did Latin American nations like Mexico not achieve an economic "takeoff" post-liberalization?
Lack of natural resources
Over-reliance on exports
High adult literacy rates
Macroeconomic instability and financial crises
25
What does the flying geese model describe?
Decline of manufacturing
Technological development in Asia
Stages of financial reform
Migration patterns of labor
