Another benefit from entering a currency union that is not optimal would include:
A) the idea that economies interconnected in a currency union with increased trade also develop a symmetry of demand shocks.
B) the reduction of interdependence and an increase in self-sufficiency.
C) the cessation of disagreement over trade protection.
D) the possibility of increasing the currency area.
Answer: A) the idea that economies interconnected in a currency union with increased trade also develop a symmetry of demand shocks.
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The costs of organizing all the affected parties so that bargaining can take place are called
A) search costs. B) collectivization costs. C) negotiation costs. D) monitoring and enforcement costs.
Refer to Figure 9.8. A $50 tariff would result in domestic consumption of
A) 600, domestic production of 100, and imports of 500. B) 500, domestic production of 200, and imports of 300. C) 400, domestic production of 300, and imports of 100. D) 300, domestic production of 400, and exports of 100. E) 200, domestic production of 500, and exports of 300.
Command-and-control policies are undesirable ways of reducing pollution because the means of abatement they mandate may not be efficient for all firms.
Answer the following statement true (T) or false (F)
In a contestable market the costs of entering and leaving the market are very:
A. high. B. low. C. low, but firms have no incentive to enter or leave. D. high and firms have no incentive to leave.