Describe the four legal procedures available to U.S. firms to seek protection from foreign competition. What circumstances would warrant a request under each? How frequently is each used? What would be the result if the firm won?
What will be an ideal response?
Countervailing duties are granted in response to foreign subsidies.
Anti-dumping duties are granted in response to imports being sold at "unfair" prices or dumping.
Escape clause relief is granted as a temporary protection against a sudden surge in imports.
Section 301 retaliation is used to unilaterally punish a nation for "unfair" trade.
Generally, tariffs are imposed if a firm is successful in its appeal for subsidies, dumping, or escape clause relief. Section 301 is likely to be a broader response to a country's practices. Anti-dumping duties are the most common today.
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The figure illustrates the market for bagels. Initially the market is in equilibrium, Then the number of bagels produced is cut from 20 to 10 an hour and the price rises to $2.00 per bagel. Consumer surplus decreases by ________
A) $5.00 an hour B) $2.50 an hour C) $7.50 an hour D) $0.50 a bagel
Unlike a banking crisis, an exchange rate crisis rarely results in a deep recession
Indicate whether the statement is true or false
________ in the domestic interest rate causes the demand for domestic assets to shift to the right and the domestic currency to ________, everything else held constant
A) An increase; appreciate B) An increase; depreciate C) A decrease; appreciate D) A decrease; depreciate
By reducing the required reserve ratio, the Fed can not only create excess reserves but also increase the money multiplier
a. True b. False Indicate whether the statement is true or false