Refer to the graph shown for a small country that is a price taker internationally.
Assume the foreign supply of this product is perfectly elastic at a price of $4 per unit. Starting from a free trade equilibrium, an import quota of 2,500 would cause domestic production to:
A. increase from 6,100 to 7,400.
B. decrease from 4,800 to 3,600.
C. increase from 2,400 to 3,600.
D. decrease from 7,400 to 6,100.
Answer: C
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As a general rule, you would be unwise to keep a deposit at an FDIC-insured bank in an amount greater than
a. 20 percent of the bank's reserves. b. $1,000,000. c. $250,000. d. an infinite amount; there is no limit.
Figure 9-2
indicates that the output of the economy, y1, is
a.
greater than the economy's long-run capacity.
b.
equal to the economy's long-run capacity.
c.
less than the economy's long-run capacity.
d.
not consistent will full employment of the economy's resources.
As the interest rate increases
A. Consumption, investment, and net exports increase, and aggregate demand increases B. Consumption increases but investment and net exports decrease; aggregate demand remains unchanged C. Consumption, investment, and net exports decrease; aggregate demand decreases
If Earl received an $800 bonus and his MPS is 0.25, his consumption rises by $________ and his saving rises by $________.
A. 400; 250 B. 825; 125 C. 800; 250 D. 600; 200