In 2002, the United States placed higher tariffs on imports of steel. According to the open-economy macroeconomic model this policy should have
a. reduced imports into the United States and made U.S. net exports rise.
b. reduced imports into the United States and made the net supply of dollars in the foreign exchange market shift right.
c. reduced imports of steel into the United States, but reduced U.S. exports of other goods by an equal amount.
d. reduced imports of steel into the United States and increased U.S. exports of other goods by an equal amount.
c
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What does empirical evidence suggest about the elasticity of labor supply? What does this suggest about the burden of the payroll tax in the United States?
What will be an ideal response?
This model thus has two leakages
What will be an ideal response?
If the desired reserve-deposit ratio is 0.25 and the banking system receives an additional $10 million in reserves, bank deposits will increase by:
A. $40 million. B. $4 million. C. $10 million. D. $250 million.
The AS/AD model looks similar to the microeconomic supply and demand model
A. but is not based on it. B. and is based on the microeconomic supply and demand model because the AS/AD is a macro representation of the micro model. C. and is based on the microeconomic supply and demand model because both are based on opportunity costs. D. and is based on the microeconomic supply and demand model because both are based on the principle of substitution.