It is better to protect an infant industry with _______ than ________.
a. a voluntary export restraint; a quota
b. a voluntary export restraint; a tariff
c. a tariff; a quota
d. a quota; a tariff
Ans: c. a tariff; a quota
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A market for a product for which demanders are willing to pay more than costs of production may not arise because of:
a. high transactions costs. b. strict price controls. c. the inability of producers to gain economies of scale. d. foreign countries dominating a domestic market for a product.
Excess reserves of banks equal
a. actual reserves minus required reserves. b. actual reserves minus demand deposits. c. assets minus the liabilities of the banks. d. required reserves minus actual reserves.
A good way to start every Three-Sector-Model analysis is to:
a. Describe what is happening in the foreign exchange market and then proceed to explain what happens in the other two markets simultaneously. b. Identify the economic effects that result from an economic change and then work your way backward to identify the most important part of the analysis, which is the economic shock that started it all. c. Analyze the chain reaction of economic interactions. d. Gather basic information about the three markets and describe qualitatively the economic setting in each market.
A tariff is imposed on strawberries. The tariff will ___________ the price of strawberries in the domestic market, _____________ the quantity of strawberries imported in the domestic market, and ____________ consumers' surplus
A) raise; lower; lower B) lower; raise; lower C) raise; lower; raise D) lower; lower; raise