It has been suggested that in order to protect U.S. jobs we need to restrict foreign competition by restricting imports.
A. This is a sound economic statement since U.S. firms will have to increase output to make up for the lack of imports leading to increase employment in the U.S.
B. This is not a sound economic statement since employment in the U.S. does not depend on imports and exports.
C. This is not a sound economic statement since import restrictions lead to a reduction in employment in the export industries of the U.S.
D. This is a sound economic statement since the U.S. will still export protecting U.S. jobs.
Answer: C
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According to the theory of rational expectations, the economy always remains at the natural rate of unemployment, irrespective of policy changes
a. True b. False Indicate whether the statement is true or false
Suppose that in a particular market, the demand curve is highly elastic, and the supply curve is highly inelastic. If a tax is imposed in this market, then the
a. buyers will bear a greater burden of the tax than the sellers. b. sellers will bear a greater burden of the tax than the buyers. c. buyers and sellers are likely to share the burden of the tax equally. d. buyers and sellers will not share the burden equally, but it is impossible to determine who will bear the greater burden of the tax without more information.
A country has a trade deficit. Which of the following must also be true?
a. net capital outflow is positive and domestic investment is larger than saving b. net capital outflow is positive and saving is larger than domestic investment c. net capital outflow is negative and domestic investment is larger than saving d. net capital outflow is negative and saving is larger than domestic investment
The law of supply:
A. shows that the relationship between producer revenue and quantity supplied is negative. B. is reflected in a downsloping supply curve. C. reflects the income and substitution effects of a price change. D. reflects the amounts that producers want to offer at each price in a series of prices.