Suppose Iran imposes a tariff on lumber. For the tariff to have any effect, it must be the case that
a. Iran is an exporter of lumber.
b. the domestic quantity of lumber supplied exceeds the domestic quantity of lumber demanded at the world price without the tariff.
c. the world price without the tariff is less than the price of lumber without trade.
d. the world price without the tariff is greater than the price of lumber without trade.
c
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A sunk cost is a cost that has already been paid and cannot be recovered
Indicate whether the statement is true or false
During the financial crisis it was proposed that firms be provided with a tax credit for investment projects. Such a tax credit would
a. raise both the interest rate and the real exchange rate. b. raise the interest rate and reduce the real exchange rate. c. reduce the interest rate and raise the real exchange rate. d. reduce both the interest rate and the real exchange rate.
If aggregate demand and aggregate supply both shift left, we can be sure that the price level is higher in the short run.
a. true b. false
Based on the multiplier effect, what does each successive round of purchasing do?
a. decrease aggregate demand and supplier income b. increase aggregate demand and supplier income c. decrease aggregate demand, and increase supplier income d. increase aggregate demand, and decrease supplier income