A tariff is better than a quota because
A. it does not distort trade as much.
B. quotas are inflexible.
C. tariffs produce tax revenue.
D. quotas hurt domestic producers; tariffs hurt foreign producers.
Answer: C
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When the multiplier is ________, an autonomous decrease in investment of $200 billion decreases equilibrium real GDP by $400 billion
When the multiplier is ________, an autonomous decrease in investment of $200 billion decreases equilibrium real GDP by $800 billion. A) 2.0; 4.0 B) 0.4; 0.2 C) 0.2; 0.4 D) 4.0; 8.0 E) $400 billion; $800 billion
According to the graph shown, if the government decides to increase its spending, it is most likely at point:
A. C
B. B
C. D
D. It's impossible to tell without more information.
A larger crowding-out effect:
a. increases the magnitude of a given fiscal policy's effect on interest rates and increases the magnitude of its effects on investment. b. increases the magnitude of a given fiscal policy's effect on interest rates and decreases the magnitude of its effects on investment. c. decreases the magnitude of a given fiscal policy's effect on interest rates and increases the magnitude of its effects on investment. d. decreases the magnitude of a given fiscal policy's effect on interest rates and decreases the magnitude of its effects on investment.
The tax rebate of 2008 is an example of
a. expansionary monetary policy. b. contraction fiscal policy. c. contraction monetary policy. d. pump priming.