If the normalization of trade relations between the U.S. and Cuba legalizes the sale of Cuban cigars in our country, it would
A. increase equilibrium price and decrease equilibrium quantity for Cuban cigars.
B. decrease equilibrium price and increase equilibrium quantity for Cuban cigars.
C. increase both the equilibrium price and quantity for Cuban cigars.
D. decrease both the equilibrium price and quantity for Cuban cigars.
B. decrease equilibrium price and increase equilibrium quantity for Cuban cigars.
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A rise in stock prices ________ the net worth of firms and so leads to ________ investment spending because of the reduction in moral hazard
A) raises; higher B) raises; lower C) reduces; higher D) reduces; lower
Which of the following is considered a problem with active policy?
a. Estimating the potential output b. Forecasting aggregate demand c. Tools must already be in place to achieve results relatively quickly. d. All of the above are problems with the implementation of active policy
When government runs a budget deficit,
a) interest rates decline b) tax revenues exceed public expenditures c) the national debt increases d) inflation rates decline e) the outstanding stock of government bonds is reduced
Arnold Harberger was the first economist to estimate the loss of economic efficiency due to market power. Since Harberger's findings were published, other researchers have studied this same issue. How do the results of these researchers compare to
Harberger's results? A) The other researchers reached conclusions similar to Harberger's; namely, the loss of economic efficiency due to market power is about 10 percent of the value of production in the United States. B) The other researchers reached conclusions different from Harberger's; namely, they found that the loss of economic efficiency due to market power is only about 1 percent of the value of production in the United States, much less than Harberger's estimate. C) The other researchers reached conclusions different from Harberger's; namely, the loss of economic efficiency due to market power is about 10 percent of the value of production in the United States, significantly greater than Harberger's estimate. D) The other researchers reached conclusions similar to Harberger's; namely, the loss of economic efficiency due to market power is about 1 percent of the value of production in the United States.