The General Agreement on Tariffs and Trade is an international agreement
A) to establish the North American continent as a free trade area.
B) to encourage peaceful settlements of trade disputes, but has no particular point of view about the desirability of higher or lower tariffs.
C) to encourage world trade by lowering tariffs and other trade barriers.
D) to make all tariffs illegal.
Answer: C
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If there is an improvement in technology that affects only Aggregate Supply and a nation's wealth falls due to a sagging stock market, then:
a. Price index falls, and the change in real GDP is uncertain. b. The change in price index is uncertain, and real GDP rises. c. The change in price index is uncertain, and real GDP falls. d. Neither the price index nor real GDP changes. e. Price index rises, and real GDP rises.
When people alter behavior in response to taxes, which of the following is not true?
A. Excess burden is created. B. Inefficiency occurs. C. Tax shifting might occur. D. The excise tax rate can increase.
An example of a U.S. export would be:
A. a bushel of apples that Canadians pick and enjoy on a lovely fall day in Vermont. B. an Apple computer purchased by a U.S. college student who plans to study abroad in France. C. an Apple computer, made in the U.S., purchased by a French student. D. a French bottle of wine consumed by an American.
Refer to the diagram. If aggregate expenditures in this economy are (C + Ig + Xn2), then the equilibrium levels of GDP and aggregate expenditures respectively will be