Question

1. US has accused china of selling steel to US below the cost of production. Chaina is accused of

1. Predatory pricing
2. Price discrimination
3. Non
4. Fair play

2. Which of the following trade restorations can help UAE to protect its local economy?

1. Local content requirements
2. All
3. AD valorem
4. Currency control

3. There are some products made in UAE and they are delivered to Algeria. But before they arrive to Algeria these products pass through Egypt ports where Egyptian government applies on them a tariff. What is this type of tariff?

1. Transit tariff
2. Export tariff
3. Import tariff
4. All

4. In 2008 India has applied export tariff on rice .Why is that?

1. To keep the price of rice low in India
2. To protect the Indian consumer
3. All
4. To generate revenue for the government

5. UAE wants to develop its sectors where it has a comparative advantage. This means that UAE should adopt a strategy that ……

1. Protect the local companies that are inefficient
2. Protect its import sector
3. Protect its infant industry
4. All

Answer 1

1. Selling a product below the cost of production is known as predatory pricing, so this what China is being accused of.

So the correct answer is option a, predatory pricing.

2. All the options in this question can helps UAE protect its local economy.

Local content requirements force firms to use locally manufactured inputs in production.

While AD valorem tax on imports can make imports expensive which will help reduce imports.

And finally currency control can help make exports cheaper so that country's exports increases.

So the correct option is option B, all.

3. Transit tariff is imposed on goods when it passes through some country's border enroute to another country for export.

Similarly here egyptian government applying a transit tariff on the exports of UAE enroute to Algeria.

So the correct option is option a, transit tariff.

4. In 2008 there was a global rice crisis, so to protect the people of India against these higher prices of rice the government of India applied export tariff on rice to protect Indian consumers.

So the correct answer is option b, to protect Indian consumers.

5. To develop sectors in which UAE has comparative advantage, in order to do that UAE must adpot a strategy that its infant industry. Since local companies which are inefficient can't be the source of comparative advantage, similarly the import industry can't have comparative advantage. Because a country only imports something when it can't produce the same good more efficiently.

So the correct answer is option C, protect its infant industry.

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