The Voluntary Export Restraint That the United States Negotiated with Japan

question 27

Multiple Choice

The voluntary export restraint that the United States negotiated with Japan:

• A) violated provisions of the GATT that encouraged countries to avoid using quotas.
• B) exploited a loophole in the GATT because the exporting country administered the quota.
• C) did not allow U.S. auto producers to raise their prices.
• D) did not impose any deadweight losses on the United States.

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Definitions:

Actual Cost

The true expenditure incurred for manufacturing, operations, or project activities.

Direct Material

Materials directly related to the production of a product, which can be specifically identified as part of the product and form a large part of its manufacturing cost.

Per Pound

A unit of measure used to express the price or cost of a commodity, production materials, or shipping rates based on weight in pounds.

Materials Price Variance

The difference between the actual cost of materials and the standard cost, multiplied by the quantity of materials purchased.