An increase in a balance of trade surplus tends to:
A. exert an expansionary effect on the economy.
B. exert a contractionary effect on the economy.
C. occur when a country's exports are too expensive.
D. occur when a country's exchange rate is too high.
Answer: A
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Refer to Price Ceiling. The price ceiling creates a deadweight loss equal to
The following questions refer to the accompanying diagram which shows the effects of a price ceiling. The initial price and quantity are P0 and Q0, respectively, and the price ceiling is imposed at the price P1. Assume that none of the potential deadweight loss can be avoided.
a. area A + H.
b. area B + C + D + E.
c. area B + D.
d. area C + E.
What is resale price maintenance? Is resale price maintenance legal in the United States?
What will be an ideal response?
Changes in inventories are included in which category under the expenditure approach to GDP accounting?
a. consumption b. government purchases c. investment d. net exports
Which of the following statements about trade is false?
a. Trade increases competition. b. With trade, one country wins and one country loses. c. Bulgaria can benefit, potentially, from trade with any other country. d. Trade allows people to buy a greater variety of goods and services at lower cost.