In the U.S., from the early 1980s through the early 1990s,
a. both inflation and nominal interest rates rose.
b. both inflation and nominal interest rates fell.
c. the inflation rate fell and the nominal interest rate rose.
d. the inflation rate rose and the nominal interest rate fell.
b
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Which of the following will tend to retard the growth and prosperity of a country?
a. imposition of price controls and regulations that restrain domestic and international trade b. an expansionary monetary policy that leads to high rates of inflation c. high marginal tax rates d. all of the above
Suppose that the U.S. imposes a countervailing duty of 10% on coated paper imported from China to offset alleged Chinese subsidies. Suppose further that the U.S. duty-free price of Chinese coated paper imports is $500 per 1,000 meter roll and that the price of an equivalent roll of U.S.made coated paper is $600 per 1,000 meter roll. What is the likely response of Chinese coated paper exporters to the U.S. countervailing duty?
a. They will not change their U.S. duty-free price of their exports and absorb all of the duties. b. They are likely to reduce their U.S. duty-free price of their exports by one-half. c. They are likely to reduce their U.S. duty-free price of their exports so that their U.S. prices, including the duties, are less than $600 per 1,000 meter roll. d. They are likely to reduce their U.S. duty-free price of their exports so that their U.S. prices, including the duties, are only slightly more than $600 per 1,000 meter roll.
Alexis de Tocqueville observed in his Democracy in America: "There is no country in which everything can be provided for by the laws, or in which political institutions can prove a substitute for
A) common sense and morality."
B) economic development."
C) police and prisons."
D) supply and demand."
E) the private pursuit of private interests."
Professor Rush decided to quit teaching economics and opens a shoe store out at the mall. He gave up an annual income of $50,000 to open the store. A year after opening the shoe store, the total revenue for the year was $200,000
Rush's expenses were $30,000 for labor, rent was $18,000, and utilities were $1,200. He also had to purchase new shoes from manufacturers, at a cost of $60,000, which was financed by cashing in his savings of $60,000 that had been in a bank earning 8 percent per year. The normal profit from operating a shoe store in the mall is $20,000. Determine Professor Rush's explicit costs, implicit costs, and economic profit.