Which of the following is an example escape clause relief?
A) A tariff is granted because foreign firms are selling below cost.
B) A temporary tariff is granted to allow for adjustment of the domestic industry.
C) A tariff is granted to an industry because foreign firms are subsidized by their governments.
D) A tariff is granted to an industry because another nation persistently uses unfair trade practices.
B
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Refer to the figure above. What is the gain in the market-wide consumer surplus when the price of calculators changes from $6 to $3?
A) $565 B) $580 C) $950 D) $1050
The economy is in a recessionary gap. There is no crowding out and government has correctly estimated that to bring the economy into long-run equilibrium it should raise government purchases by $123 billion. If government purchases are raised by $123 billion, does it follow that the economy will be moved into long-run equilibrium?
A) Yes, because all the necessary conditions for effective fiscal policy are present. B) No, because the economy may be self-regulating, and by the time expansionary fiscal policy is effective, the AD curve may intersect the SRAS curve at an inflationary-gap level of Real GDP. C) Yes, because of the validity of the balanced budget theorem. D) No, because of inflexible wages and the fact that the SRAS curve is upward-sloping. E) none of the above
A movement from one point to another point on the same consumption function could be caused due to
A. changes in wealth. B. an increase in the general price level. C. decrease in the real interest rates. D. changes in disposable income.
If elasticity of demand is 10 and price is raised from $100 to $102, by what percentage will quantity demanded fall?
What will be an ideal response?