The effect of a tariff is
A) an increase in consumers' surplus.
B) a decrease in producers' surplus.
C) an increase in tariff revenues for government.
D) b and c
E) all of the above
C
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In the presence of a negative externality
a. there is an overallocation of resources to production b. the competitive equilibrium will not achieve an allocatively efficient solution c. MSC exceeds MSB at the competitive output level d. all of the above e. (a) and (b) only
If the World Bank lends $10 million to the government of Fiji to develop new sugar cane fields, that would be seen on Fiji’s international balance of payments as a
a. unilateral transfer. b. settlement account entry. c. financial account entry. d. service transaction in the current account.
Monetarists reject using discretionary monetary policy as an effective stabilization tool because
a. it would require the money supply to grow at a rate equal to the economy's long-run rate of economic growth. b. they do not believe that changes in the money stock affect output or prices. c. they believe that there are lengthy and variable time lags between when a change in monetary policy is instituted and when the change exerts its primary impact on output and prices. d. they believe monetary policy can stimulate aggregate demand, but it cannot control inflation.
If aggregate demand decreases and aggregate supply decreases, the level of real output will
A. Decrease, and the price level will definitely decrease. B. Decrease, but the price level is indeterminate. C. Either increase or decrease, but the price level will stay the same. D. Decrease, and the price level will definitely increase.