The most important role of the World Trade Organization is
(a) to promote market oriented economic policies.
(b) to settle trade disputes.
(c) to provide development assistance.
(d) to help countries choose the appropriate level of a tariff or quota.
B
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As Americans have become more health conscious, rules about food labels have become more complex and stringent. This is an example of government acting as
A. referee. B. redistributor. C. taxer. D. defender.
An export subsidy has the opposite effect on terms of trade to the effect of an import tariff. Domestically a tariff will raise the price of the import good, deteriorating the domestic terms of trade
A production subsidy for the export product will lower the local price of the export good, lowering the domestic terms of trade for the country. Hence the export subsidy and the import tariff have the same effect. This analysis seems to contradict the first sentence in this paragraph. Discuss this paradox.
Generally, if a nation produces more consumer goods than capital goods
A) more of all goods may be produced in the future. B) less of all goods may be produced in the future. C) about the same amount of capital goods may be produced in the future as are being produced today. D) society will have to forego future consumption of capital goods.
How is the production of public goods funded?