"Trade restrictions such as tariffs and quotas are like a blockade that a nation imposes on its own people." Is this statement true?
What will be an ideal response?
Yes, both the trade restrictions and a blockade will reduce the gains from specialization and trade.
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The market supply curve is found by
A. plotting and summing up the supply curves of individual firms. B. plotting the supply curves of individual consumers. C. taking the supply curve of the representative firm. D. plotting the supply curves of individual firms.
What happens at a firm's point of saturation?
A) For the first time, hiring an additional worker decreases total product. B) Workers cannot take on any additional tasks without working overtime hours. C) The market for a firm's output has been saturated and sales fall to zero. D) The firm's total costs exceed its revenues.
If the expected path of one-year interest rates over the next five years is 4 percent, 5 percent, 7 percent, 8 percent, and 6 percent, then the expectations theory predicts that today's interest rate on the five-year bond is
A) 4 percent. B) 5 percent. C) 6 percent. D) 7 percent.
Which of the following best describes the assumption that monetarists make regarding velocity?
a. It is fairly predictable in the short run and certainly in the long run. b. It is not possible to predict velocity in the short or long run. c. It is variable in the long run but predictable in the short run. d. It is constant in the long run but variable in the short run.