A tax imposed by a country on an imported good or service is called a
A. quota.
B. tariff.
C. non-tariff barrier.
D. trade embargo.
Ans: B. tariff.
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To find the Real interest Rate
What will be an ideal response?
An increase in government expenditures may lead people to expect that in the future taxes will rise and create greater distortions. By themselves these changes in expectations lead people to
a. raise both consumption and investment. b. raise consumption but reduce investment. c. raise investment but reduce consumption. d. reduce both consumption and investment.
Refer to the graph. Consider an asset represented by point F. The process of arbitrage will draw investors to the higher rates of return,
A. increasing both price and the average expected rate of return.
B. changing the intercept of the Security Market Line until it intersects point F.
C. changing the slope of the Security Market Line until it intersects point F.
D. increasing the asset's price and lowering the average expected rate of return.
When a currency is undervalued, international reserves ________ and the country has a balance-of-payments ________.
A. decrease; surplus B. increase; surplus C. increase; deficit D. decrease; deficit