A tax levied on imported goods is called a(n):
A. excise tax.
B. quota.
C. foreign profits tax.
D. tariff.
Answer: D
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If the Fed increases the quantity of reserves, a new equilibrium is reached by a
A) leftward shift of the demand for reserves curve. B) movement down the demand for reserves curve. C) movement up the demand for reserves curve. D) rightward shift of the demand for reserves curve. E) None of the above answers is correct.
There are two existing firms in the market for computer chips. Firm A knows how to reduce the production costs for the chip and is considering whether to adopt the innovation or not. Innovation incurs a fixed setup cost of C, while increasing the revenue. However, once the new technology is adopted, another firm, B, can adopt it with a smaller setup cost of C/2. If A innovates and B does not, A earns $20 in revenue while B earns $0. If A innovates and B does likewise, both firms earn $15 in revenue. If neither firm innovates, both earn $5. Under what condition will firm A innovate?
A. C < 30 B. 35 > C > 25 C. 10 > C > 0 D. C > 30
Assume that policy makers are pursuing a fixed exchange rate regime and that the economy is initially operating at the natural level of output. Which of the following will occur as a result of a revaluation?
A) The real exchange rate will be permanently higher in the medium run. B) The real exchange rate will be permanently lower in the medium run. C) The effects of this revaluation on the real exchange rate will be ambiguous in the medium run. D) The real exchange rate will be unchanged in medium run. E) The nominal exchange will initially fall in the short run and then increase in the medium run.
The individual firm's demand curve facing a monopoly is
A. nonexistent. B. the summation of all perfectly competitive firms' demand curves. C. also the market demand curve. D. the marginal cost curve above minimum average variable cost.