Reducing protectionism allows greater gains from free trade.
Answer the following statement true (T) or false (F)
True
Less protectionism leads to greater specialization and therefore more output for the entire world.
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In the model of public goods, when the government chooses public goods provision optimally
A) there is no public goods production. B) public goods are provided in an amount equal to private goods. C) the marginal rate of substitution of private goods for public goods equals the marginal rate of transformation. D) GDP is maximized.
The government would use production taxes to remedy the problem of substantial:
a. internal benefits of production. b. external benefits of production. c. external costs of production. d. external benefits of consumption e. external costs of consumption.
A system of allocating scarce goods and services using some criteria other than price:
a. rationing b. price floor c. excess demand d. surplus e. equilibrium
You are given the following information about the economy: (1) nominal interest = 8 percent; (2) real rate of interest = 6 percent. The inflation premium is:
A. 14 percent. B. 6 percent. C. 2 percent. D. 8 percent.