Question

The ________ specifies that government agencies must give preference to American products when putting contracts for equipment out to bid unless the foreign products have a significant price advantage.

		Smoot-Hawley Act
		Helms-Burton Act
		Hawley-Burton Act
		Buy America Act
		Byrd Amendment

In the 1980’s Voluntary Export Restraints imposed by the United States resulted in:

		fewer bananas imported into the US
		Japanese investment in auto manufacturing plants in the US
		a trade war between the US and Russia
		Cuban cigars not being available in the US
		US exports voluntarily reduced

Infant industry argument is used to:

		Justify protectionism
		Provide for consumer protection
		Further foreign policy objectives
		Protect the rights of babies and their mothers
		Retaliate against rogue countries

The __________ of foreign direct investment refers to the amount of FDI undertaken over a given period (normally a year). The __________ of foreign direct investment refers to the total accumulated value of foreign-owned assets at any time.

		portfolio, current
		flow, stock
		stock, flow
		stockpile, portfolio
		level, amount

Foreign direct investment is the best strategy when:

		high trade barriers exist
		there is no need to protect technological know-how
		transportation costs are low
		corruption is rampant in the foreign country
		there is a lot of anti-American sentiment in the foreign country

Answer 1

1) Option D :- Buy America Act

• In 1933, the US congress introduced the ACT Buy America act.
• this act states that the government should prefer buying American made products.
• It applies for all federal government agency purchases.

2) Option B :- Japanese investment in auto manufacturing plants in the US

• In the 1980’s Voluntary Export Restraints imposed by the United States resulted in Japanese investment in auto manufacturing plants in the US

3) Option A :- Justify protectionism

• Infant industry argument is used to justify protectionism
• It states that the nascent industries should be protected.

4) Option B :- flow, stock

• we know that the flow of FDI points to the amount of FDI undertaken over a specified period.
• The stock of FDI refers to the total accumulated value of foreign-owned assets at any time.

5) Option C :- Transportation costs are low

• Foreign direct investment is the best strategy when transportation costs are low

Thanks