Question

hich of the following statements about a free trade agreement is accurato? The gains are shared equally by each member. Increased competition can result in higher commodity prices in the domestic markets of the member countries. Supplier firms might benefit from economies of scale that allow them to lower average costs t can increase the opportunities for domestic business investments but will decrease foreign direct investment into the member countries QUESTION 5 Suppase that the WTO determines that one of the member countries has a trade policy that is violating a WTO rule and that country refuses to change the policy. What can the WTO do to enoourage the country to change the policy? The WTO can expel the country from the WTO The WTO can impose a fine against the country The WTO can raise the membership fees for the country. The WTO can authonize other countries to impose retaliatory trade policies against the country that is in violation of the rules QUESTION6 What was the effect of the Smoot-Hawley Act? It required that China limit exports of technology to the U.S. and contributed to the global financial crisis that began 2008. It repealed certain tarlffs that were hindering the U.S. from recovering from the Great Depression. It increased tarififs on certain imports into the U.S. and contributed to the severity of the Great Depression. It prohibited the U.S. govemment from imposing a varlety of nontariff barriers. QUESTION 7 The World Trade Organization was created in 1995 to: oversee the implementation of intemational trade agreements. provide a forum where trade disputes can be litigated and decided by a body that can directly enforce its decisions encourage the imposition of nontariff barriers instead of imposition of tariffs All of these are correct.

Answer 1

Q4. Option 3. Through free trade, it allows nations to get specialized so that the costs of production decreases
Q5. Option 4. The rules are enforced by the members themselves under agreed procedures including trade sanctions
Q6. Option 3
Q7. Option 4. To favor free trade through specialization and remove trade barriers to encourage smooth business