A tariff can best be described as
A. an excise tax on an imported good.
B. a government payment to domestic producers to enable them to sell competitively in world markets.
C. an excise tax on an exported good.
D. a law that sets a limit upon the amount of a good that can be imported.
A. an excise tax on an imported good.
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Inflation reduces the purchasing power of nominal income and increases the purchasing power of fixed income
a. True b. False Indicate whether the statement is true or false
One explanation economists offer to explain why a decline in the unemployment rate can raise the rate of inflation rates is that
a. firms will be put in a position of competing more intensely for scarce resources b. people will pay higher prices because competition among the suppliers—the firms—intensifies c. workers will focus more directly on protecting their jobs d. firms will refuse to shift higher labor costs along to consumers for fear of losing their markets e. more workers will drop out of the labor market
To fight recession, the government may
a. decrease aggregate demand, which will also lead to lower unemployment rates. b. increase aggregate demand, which will also lead to higher price levels. c. increase aggregate demand, which will also lead to lower price levels. d. decrease aggregate demand, which will also lead to higher unemployment rates.
Goods with close substitutes tend to have more elastic demands than do goods without close substitutes
a. True b. False Indicate whether the statement is true or false