The basic difference between a tariff and quota is that:
a. a quota can be imposed both on imports and exports, whereas a tariff can be imposed only on imports.
b. a quota yields revenue to the government, whereas a tariff does not yield any revenue.
c. a tariff reduces the import of the goods with greater certainty than quota as the amount of import restricted by quota depends on the price elasticity of demand for importable.
d. a tariff is a quantitative restriction on imports, whereas a quota is an import duty.
e. a tariff raises the price of the product only in the domestic market, whereas with a quota, both domestic and foreign producers receive a higher price.
e
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Suppose Fed's purchase of government bonds results in a $120,000 increase in the excess reserves of a particular bank. What would be the applicable reserve requirement for the whole banking system to be able to expand the money supply by $600,000?
a. 10 percent b. 12 percent c. 16 percent d. 20 percent e. 25 percent
If real interest rates decrease, the _____
a. investment spending function shifts upward b. investment spending function shifts downward c. consumption function rotates upward d. consumption function shifts upward
Asset price bubble is an increase in the price of assets that goes far beyond what can be justified by improving the fundamentals.
Answer the following statement true (T) or false (F)
The Bertrand model of oligopoly reveals that:
A. capacity constraints are not important in determining market performance. B. changes in marginal cost do not affect prices. C. perfectly competitive prices can arise in markets with only a few firms. D. All of the statements associated with this question are true.