Suppose that American firms claim that protectionism in Canada is on the rise as the Canadian government attempts to protect its infant industries with a "Buy Canadian" provision. This policy, similar to the original "Buy American" provision in the 2009
U.S. stimulus bill, is likely to cause
A) exporting countries to retaliate by placing trade barriers on their imports from Canada.
B) Canadian manufacturers to become more efficient.
C) Canadian companies to pay lower prices for protected products.
D) most countries to reduce their own trade barriers to be able to better compete with Canadian imports at home.
Answer: A
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The long-run aggregate supply curve
A) is horizontal. B) has a steep but positive slope. C) has a negative slope. D) is vertical.
Suppose a banking system has a required reserve ratio of 0.10. How much can the money supply increase in response to a $500 increase in excess reserves for the whole banking system?
A. $4,500. B. $5,000. C. $50. D. $500.
Which of the following are tools used by the Fed to implement monetary policy?
A. Printing Federal Reserve notes B. Open market operations C. Minting coins D. Regulating banks activities
If the equilibrium price of good X is $5 and a price ceiling is imposed at $4, the result will be a(n):
A. accumulation of inventories of unsold gas. B. shortage. C. surplus. D. quantity supplied that exceeds the quantity demanded.