Suppose a new EU member begins substituting its imports from non-EU members to other EU members. This is an example of
A) trade diversion.
B) trade deflection.
C) free trade.
D) trade detection.
Answer: A
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Communist countries worked under the premise that
a. people, when left on their own without government intervention, will find the best use of available resources b. central planners were in the best position to determine the allocation of scarce resources in the economy. c. households and firms, guided by an "invisible hand," could achieve the most efficient allocation of scarce resources. d. allowing the market forces of supply and demand to operate with no government intervention would achieve the most efficient allocation of scarce resources.
In an open-market sale the Federal Reserve ________ government bonds and the supply of bank reserves ________.
A. buys; increases B. sells; increases C. sells; decreases D. buys; decreases
A positive temporary supply side shock will:
A. increase the level of potential output in the long run. B. decrease the price level in the long run. C. increase the price level in the long run. D. have no effect in the long run.
Refer to the given diagram. The marginal propensity to consume is:
A. .2.
B. .8.
C. .4.
D. .3.