Q1. Devices that set up multiple exchange rates between the currencies of two na

Question

Q1. Devices that set up multiple exchange rates between the currencies of two nations are known as
   a. tariff quotas
   b. export subsidies
   c. exchange controls
   d. variable currencies

Q2. As a result of a tariff, domestic consumers buy
   a. fewer units at a higher price
   b. fewer units at a lower price
   c. more units at a lower price
   d. more units at a higher price

Q3. The Reciprocal Trade Agreement Act of 1934
   a. increased the level of tariffs in the United States
   b. was the first in a series of retaliatory trade acts passed by Congress
   c. was the first in a series of Congressional acts reducing tariffs
   d. increased the level of tariffs in the United States AND was the first in a series of retaliatory trade acts passed by Congress

Q4. If a tariff is increased to a level high enough to prevent any imports from entering the country, the tariff has the same effect as
   a. an export subsidy
   b. a voluntary export restraint
   c. dumping
   d. an embargo

Q5. A tariff is a
   a. tax on exports
   b. penalty imposed on exporters who export a greater quantity than the quota allows
   c. penalty imposed on importers who import a greater quantity than the quota allows
   d. tax on imports

Explanation / Answer

c. exchange controls a. fewer units at a higher price. Due to tariff, pric eof imports rise and hence demand decreases. c. was the first in a series of Congressional acts reducing tariffs as this gave power to president to negotiate with other nations to reduce tariffs in return for reciprocal reduction in tariffs in US. d. an embargo which means an official ban on trade or other commercial activity with a particular country. d. tax on imports. This is done to restrict trade.

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