What is GATT and what happened to tariff rates as a result of GATT?
What will be an ideal response?
GATT is the General Agreement on Tariffs and Trade. It is an international agreement established after World War II to encourage world trade by reducing barriers and tariffs. U.S. tariff rates have fallen from over 30 percent on average to around 5 percent, although this may overstate the reduction of trade barriers since voluntary export restraints have been used in recent years.
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Comparing the cost of the same basket of goods in different locations:
A. can create a price index to evaluate purchasing power across different locations. B. is based on the theory of purchasing power parity. C. can be used for international price comparisons. D. All of these statements are true.
People who live in countries with ________ average incomes generally live __________ lives.
A. lower; shorter B. lower; longer C. higher; shorter D. higher; more meaningful
The difference between the value of a product at the end of one stage of production and the cost of materials purchased from other firms at the beginning of this stage is the
A. value added. B. net input cost. C. production profit. D. gross input cost. E. value of the intermediate product
Refer to the information provided in Figure 16.4 below to answer the question(s) that follow.Los Angeles International Airport (LAX) is located next to Playa Del Rey. The noise from air traffic negatively affects individuals living in Playa Del Rey, however, this cost is not considered by airlines or air travelers. The airlines feel they have a right to use the airspace while the individuals living in Playa Del Rey feel they have the right to quiet. The following diagram depicts the marginal costs and marginal benefits associated with air travel.
Figure 16.4Refer to Figure 16.4. Suppose the government assigns property rights to the residents of Playa Del
Rey, then the airlines and the residents engage in negotiations. The resulting efficient level of air travel is A. 0 units. B. 100 units. C. 120 units. D. indeterminate from the given information.